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According to aggregate supply curve what happens as the price level increases?
Wiki User
∙ 7y ago
firms have more of an incentive to increase output
Ora Nader
MeGustaCulo
Firms have more of an incentive to increase output.
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What happens to the equilibrium price levels and real GDP when aggregate demand decreases and aggregate supply increases?
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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.
What According to the law of supply and demand when supply increases what else happens?
According to the law of supply and demand when supply increases, prices will decrease.
What happens to the aggregate supply curve as the price level increases?
Firms have more of an incentive to increase output
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.
As GDP increases on the horizontal axis of your aggregate supply aggregate demand graph what is happening to the rate of unemployment?
it increases
What will happen to the equilibrium price level and the real GDP if the aggregate demand increases and aggregate supply decreases?
The equilibrium price level increases, but the real GDP change depends on how much aggregate demand and aggregate supply change by.
What will happen to the equilibrium price level and the real GDP if the aggregate demand decreases and aggregate supply increases?
The equilibrium price level increases, but the real GDP change depends on how much aggregate demand and aggregate supply change by.
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.
When according to the law of supply and demand when supply increases what else happens?
According to the law of supply and demand when supply increases, prices will decrease.
According to Adam Smith what happens when the supply of a product increases?
The price decreases.
According to Adam Smith what happens when demand for a good increases?
The supply decreases.
