There is currently a wave of pessimism due to the current economic situation, high rate of inflation, high price of gasoline, the war in Ukraine, high interest rates, etc. consumers are afraid to spend, investors are afraid to invest, the stock market could have a crash, etc.

With regard to the US economy and the current situation , use the elements provided in chapter 33 to analyze the following:

Which are the macroeconomic variables that have been affected by the current events and how are they being affected? (Economic Fluctuations pgs. 704-707).

In your opinion, do you think that the stimulus checks have increased Aggregate Demand? Besides aggregate demand, what other economic indicator has been impacted by the stimulus money?

In your analysis, you can use the steps we learned in chapter 4 (and used again in this chapter):

Decide whether the events shifts the aggregate-demand curve or the aggregate-supply curve (or perhaps both).

Decide the direction in which the curve shifts.

Use the diagram of aggregate demand and aggregate supply to determine the impact on output and the price level (inflation rate) in the short run.