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The equilibrium price level increases, but the real GDP change depends on how much aggregate demand and aggregate supply change by.
The equilibrium price level increases, but the real GDP change depends on how much aggregate demand and aggregate supply change by.
The equilibrium price level increases, but the real GDP change depends on how much aggregate demand and aggregate supply change by.
An increase in the nation's money supply lowers interest rates, thus decreases the cost of doing business. With a higher return on investment, investment spending increases and so too does aggregate supply. As aggregate supply increases, aggregate demand increases and so prices go up. Thus real GDP and APL increase.
aggregate demand will decrease, lowering both real GDP and the price level
aggregate demand will decrease, lowering both real GDP and the price level
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it increases
AD is reduced and so is GDP
GDP is a measure, a better question is what affects GDP. GDP is, specifically a measure of a country's production. A higher GDP signals growth, efficient production, it may affect policy decisions, it may affect Federal Reserve decisions (money supply and interest rate, target inflation rate etc.)
A graphed line showing the relationship between the aggregate quantity supplied and the average of all prices as measured by the implicit GDP price deflator.
The Long-Run Aggregate Supply Curve is vertical at full-employment GDP with respect to the price level. In the long-run the quantity of output supplied depends on the economy's resource endowment, technology, and its governing institutions. The price level does not affect these variables in the long-run.