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Ceteris paribus the price level will fall when A The aggregate supply curve shifts to the left B The aggregate demand curve shifts to the left C The aggregate demand curve shifts to the right?
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∙ 14y ago
b
Wiki User
∙ 14y ago
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What happens to supply curve when more producers enter the market?
In normal circumstances, ceteris paribus, the supply curve shifts left as competition drives down prices.
How would a rise in the business investment affect the aggregate demand curve?
The aggregate demand curve shifts to the right
An decrease in taxes shifts the aggregate demand curve to the?
right
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.
What happens to prices and output in short run when Short-run aggregate demand shifts left?
Prices rise, output rises
What If supply shifts to the left and demand remains constant?
ceteris paribus this would lead to the equilibrium production decreasing, with the price effect depending on the characteristics of the supply relation.
How would a rise in business affect the aggregate demand curve?
The aggregate demand curve shifts to the right
What happens to supply curve when more producers enter the market?
In normal circumstances, ceteris paribus, the supply curve shifts left as competition drives down prices.
How would a rise in the business investment affect the aggregate demand curve?
The aggregate demand curve shifts to the right
An increase in taxes shifts the aggregate demand curve to the?
Left
An decrease in taxes shifts the aggregate demand curve to the?
right
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.
What happens to prices and output in short run when Short-run aggregate demand shifts left?
Prices rise, output rises
What happens to the aggregate expenditures curve when autonomous expenditures fall?
Aggregate expenditures will shifts down by the decline in aggregate expenditures.
Explain movements along the aggregate demand curve and shifts of the aggregate demand curve?
Movements along the aggregate demand curve are caused by changes in price level - real wealth effect, interest rate effect and open economy effect. If some non-price level determinant causes total spending to increase/decrease then the curve will shift to the right/left - consumption, investment, government expenditure, net exports.
The interest rate falls if Answer a money demand shifts left or money supply shifts right b either money demand or money supply shifts left c money demand shifts right or money supply shi?
a
What will happen to the equilibrim price level and real GDP if aggregate demand and aggregate supply both increase?
If aggregate demand increases at every price level than the demand curve shifts to the right. In the short-run the new equilibrium forms from an increase in willingness to spend, thus higher prices and higher real GDP or quantity of output. If short-run aggregate supply increases at every price level than the supply curve shifts to the right. From the short-run to the long-run the new equilibrium forms from an increase willingness to sell, thus prices reduce to original equilibrium and output increases further. Recap: Prices stay constant while real GDP or total quantity of output increases.
