How do the events given in the news clip influence South Africa’s aggregate demand and short-run aggregate supply?
______________ short-run aggregate supply and ______________ aggregate demand.
Wrong! - Which of the events influence production capabilities of firms and change short-run aggregate supply? What are the components of aggregate demand? Which of the events decrease aggregate demand?
Good Job! - Electricity outages and flood damage hamper the production capabilities of firms and decrease short-run aggregate supply. Consumption expenditure is a component of aggregate demand. Weakening consumer confidence decreases consumption expenditure, and electricity outages that decrease consumption of heating, cooling, and cooking also decrease consumption expenditure. A decrease in consumption expenditure decreases aggregate demand.
