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Is a decrease in aggregate demand or aggregate supply more preferable?
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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.
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
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.
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
Because tax cuts will likely affect both aggregate demand and aggregate supply does it matter which is affected more?
Because a tax increase will cause consumption to decrease, an aggregate demand has a greater effect.
Concern about an international crisis has caused consumers to save their money and postpone big purchases. What is the effect on aggregate demand and aggregate supply?
aggregate demand will decrease, lowering both real GDP and the price level
What would cause a decrease in aggregate supply?
Aggregate supply is the supply of all goods and services within a country. Which of the following would most likely cause a decrease in the aggregate supply
Why does aggregate demand go up when money supply increases?
It doesn't. Money supply has no effect on aggregate demand. Aggregate demand is only effected by the buying power of money, real interest rate, and the real prices of exports and imports. If the supply of money goes up it only causes a short term decrease in the nominal interest rate. The price level is not accompanied by a decrease in the supply of money so the real interest rate does not rise.
The quantity of full employment in the aggregate supply aggregate demand model is similar to the conditions in which other model?
The quantity of full employment in the aggregate supply aggregate demand model is similar to the conditions in which other model. (Market Supply and Demand.)
Fiscal and monetary policies are used to shift the aggregate supply curve or the aggregate demand curve?
Aggregate demand curve.
What is aggregate shock?
In economics, the supply curve in the aggregate supply and demand model shifts drastically to the left due to an inadequacy of resources or because the demand overpowers the supply.
