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It goes down until a certain price level at which consumers realize goods are cheap and start buying again. This ends the recession.
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∙ 15y ago
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What will happen when Aggregate demand and aggregate supply decrease?
When aggregate demand and aggregate supply both decrease, the result is no change to price. As price increases, aggregate demand decreases, and aggregate supply increases.
A decrease in government spending will cause a?
decrease in aggregate demand
What happens with a decrease in aggregate demand?
Aggreagate demand will increase.
In an aggregate demand-aggregate supply diagram what will equal decreases in government spending and taxes do?
No effect. Spending will decrease Aggregate Demand, lower taxes will raise Aggregate Demand
Does increasing taxes decrease aggregate demand?
cause of incresing and decresing the Determinants of aggregate?
What will happen when Aggregate demand and aggregate supply decrease?
When aggregate demand and aggregate supply both decrease, the result is no change to price. As price increases, aggregate demand decreases, and aggregate supply increases.
A decrease in government spending will cause a?
decrease in aggregate demand
What happens with a decrease in aggregate demand?
Aggreagate demand will increase.
In an aggregate demand-aggregate supply diagram what will equal decreases in government spending and taxes do?
No effect. Spending will decrease Aggregate Demand, lower taxes will raise Aggregate Demand
Does increasing taxes decrease aggregate demand?
cause of incresing and decresing the Determinants of aggregate?
An decrease in taxes shifts the aggregate demand curve to the?
right
What will happen if Aggregate demand increases and aggregate supply decreases?
An increase in aggregate demand and a decrease in aggregate supply will result in a shortage: there will be more goods and services demanded than that which is being produced.
What will happen if Aggregate demand increases and aggregate supply increases?
An increase in aggregate demand and a decrease in aggregate supply will result in a shortage: there will be more goods and services demanded than that which is being produced.
What happens to aggregate demand if government spending on infrastructure increases?
The Aggregate demand will shift to the right. this is because the output increases as well as the price level. When taxes decrease, it causes the shift. Th short run and Long run will also increase
Concern about an international crisis has caused consumers to save their money and postpone big purchases what is the effect on aggregate demand and supply?
aggregate demand will decrease, lowering both real GDP and the price level
What does a decrease in Aggregate demand mean starting from long-run equilibrium?
No
What did Keynes sat causes unemployment?
Aggregate Demand
