Respond substantively (a minimum of 100 words) to at least two of your classmates' posts. What is different or similar between your post and your classmates' posts? What advice could you offer your classmates? Substantive responses use theory, research, and experience or examples to support ideas and advance the class knowledge on the discussion topic.

What are the different effects between aggregate demand-based growth and aggregate supply-based growth?

Aggregate demand-based growth aims to create a long term increase in output and employment whereas aggregate supply-based growth seeks to produce long term increases in real output and income.

What may shift aggregate supply to the right? Thoroughly explain its process.

Aggregate supply may be shifted to the right in response to increases in resource or productivity. Increases in capital stock increase productivity because firms will have more or better functioning machinery to produce their products. Increases in the size or quality of the labor force increase resources and productivity because you have more workers (resources) that can push more products, when the quality of your labor force increases they may improve processes which may result in more productivity. Additional natural resources will not only increase productivity because firms can produce more but also free up money (resource) since the price of natural resources is likely to fall. This additional money can be put to use in other ways to progress firms. Technological advances work in the same way as improving the quality of the labor force, processes are improved either saving money on excessive resources or cutting down production time (meaning more products can be produced) and this aids in an increase in resources and productivity.

As a policy maker, would you prefer the strategies of aggregate supply-based economic growth or aggregate demand-based growth? Why or why not?

As a policy maker I would prefer the strategy of aggregate demand-based growth. Aggregate demand-based growth aims to satisfy a long term increase in output and employment which to me seems more sustainable than long term real output and income. A focus on income does not produce a balance in the economy. Firms and individuals do act out of self-interest, which more times than not is in an effort to increase profits and disposable income, but that is within the bounds of the economic structure. If we switch to a supply driven economy companies would try to decrease labor size for the trade-off of better technology because it is more cost efficient. An income driven may also come with adverse effects to the environment and health and well-being of the people. "Supporters of supply-side economics are often very critical of government regulations in environmental, health, and safety areas that increase costs of production and drive up prices without increasing output" (Amacher & Pate, 2019, p. 15.4).

As a proponent of either aggregate supply-based growth strategies or aggregate demand-based growth strategies, what would you recommend for the current U.S. economy to achieve stable economic growth?

Even as a proponent of aggregate demand-based growth strategies I would recommend that we look at aggregate demand and aggregate supply as two sides of the same coin. Both have to be considered to make the most precise decisions.

Reference

Amacher, R., & Pate, J. (2019). Principles of macroeconomics (2nd ed.). Bridgepoint Education.