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Because tax cuts will likely affect both aggregate demand and aggregate supply does it matter which is affected more?
Wiki User
∙ 13y ago
Because a tax increase will cause consumption to decrease, an aggregate demand has a greater effect.
Wiki User
∙ 13y ago
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What is aggregate demand and what are the factors that affect aggregate demand?
nothing
Why interest rate has no affect on the aggregate demand?
The interest rate does affect aggregate demand. As the interest rate falls, aggregate demand increases and vice-versa.
How would a rise in the business investment affect the aggregate demand curve?
The aggregate demand curve shifts to the right
What are the factors that would affect the aggregate demand?
Consumption, investment, government spending, net exports, and aggregate expenditures.
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 is aggregate demand and what are the factors that affect aggregate demand?
nothing
Why interest rate has no affect on the aggregate demand?
The interest rate does affect aggregate demand. As the interest rate falls, aggregate demand increases and vice-versa.
How would a rise in business affect the aggregate demand curve?
The aggregate demand curve shifts to the right
How would a rise in the business investment affect the aggregate demand curve?
The aggregate demand curve shifts to the right
What are the factors that would affect the aggregate demand?
Consumption, investment, government spending, net exports, and aggregate expenditures.
What is the definition of demand side policy?
Policies designed to affect aggregate demand: fiscal policy and monetary policy.
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.
Why do most economists use the aggregate demand and aggregate supply model?
Because using aggregate demand and aggregate supply is a good way to see the big picture of the economy, which is most of the point of macroeconomics, and because they can be related to each other in meaningful, logical ways.
Which of these is centered on aggregate demand?
Fiscal policy is centered on aggregate demand.
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 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.
Fiscal and monetary policies are used to shift the aggregate supply curve or the aggregate demand curve?
Aggregate demand curve.
