Which of the following events will increase the quantity demanded of bottled water?
A) a fall in the price of bottled water
B) a rise in the price of bottled water
C) a rise in the price of a fitness club membership
D) a fall in the price of soda
E) an increase in the number of buyers of bottled water
Question 2
Draw an aggregate supply and aggregate demand graph which shows the economy producing an output which exceeds potential output in the short run, and the adjustment that will occur as the economy adjusts to long-run equilibrium.
What will be an ideal response?