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What is an example of a positive external shock aggregate Supply?
Good weather leads to an unusually productive harvest for corn farmers.
What is an example of a positive shock to aggregate supply?
Good weather leads to an unusually productive harvest for corn farmers.
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.
Can the aggregate demand curve move independently of the aggregate supply curve?
Yes, the aggregate demand curve can move independently of the aggregate supply curve. Factors such as changes in consumer confidence, monetary policy, and fiscal policy can shift the aggregate demand curve without directly affecting aggregate supply. For example, an increase in government spending can boost aggregate demand while aggregate supply remains unchanged in the short term. However, over time, changes in demand can influence supply as businesses adjust to new economic conditions.
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
What is the key difference between the classical and Keynesian aggregate supply functions?
Classical Aggregate Supply function is vertical whereas the Keynesian Aggregate Supply function is positively sloped.
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.)
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 are the components of Aggregate Supply?
aggregate supply is the total number of good and services produced in a country. The components are GOODS and SERVICES
Aggregate demand and Aggregate supply curve?
The aggregate demand curve show what consumers are willing to buy at a given price level, whereas the aggregate supply curve shows what producers are willing to produce at a given price level.
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.
