Problem
1. Which is more inflationary in the short run, investment spending or government spending? Which is more inflationary in the long run, investment spending or government spending? Explain.
2. Use inventory analysis to explain how the economy would adjust to an increase in aggregate supply and to a decrease in aggregate supply. Do inventories act as a leading indicator of RGNP here? Explain.
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.