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Yes. if a price is lower, then then demand will be higher, because a person will get a relative value for less cost than it had before, and therefore more people will buy more products. and the other way around.

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Using the AD-AS framework what is the impact on equilibrium price and output when there are increase in aggregate demand and aggregate supply simultaneously?

AD-AS represents aggregate demand curve (AD) and aggregate supply curve (AS). "In the aggregate demand-aggregate supply model, each point on the aggregate demand curve is an outcome of the IS-LM model for aggregate demand Y based on a particular price level. Starting from one point on the aggregate demand curve, at a particular price level and a quantity of aggregate demand implied by the IS-LM model for that price level, if one considers a higher potential price level, in the IS-LM model the real money supply M/P will be lower and hence the LM curve will be shifted higher, leading to lower aggregate demand; hence at the higher price level the level of aggregate demand is lower, so the aggregate demand curve is negatively sloped


What will happen to the equilibrium price level and the real GDP if the aggregate demand decreases 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.


When aggregate supply exceeds aggregate demand what will happen to the price level?

The price will go down.


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?

b


Which of the following adjusts to bring aggregate supply and demand into balance?

The price level and real output.

Related Questions

Using the AD-AS framework what is the impact on equilibrium price and output when there are increase in aggregate demand and aggregate supply simultaneously?

AD-AS represents aggregate demand curve (AD) and aggregate supply curve (AS). "In the aggregate demand-aggregate supply model, each point on the aggregate demand curve is an outcome of the IS-LM model for aggregate demand Y based on a particular price level. Starting from one point on the aggregate demand curve, at a particular price level and a quantity of aggregate demand implied by the IS-LM model for that price level, if one considers a higher potential price level, in the IS-LM model the real money supply M/P will be lower and hence the LM curve will be shifted higher, leading to lower aggregate demand; hence at the higher price level the level of aggregate demand is lower, so the aggregate demand curve is negatively sloped


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.


What will happen to the equilibrium price level and the real GDP if the aggregate demand decreases 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.


When aggregate supply exceeds aggregate demand what will happen to the price level?

The price will go down.


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?

b


Which of the following adjusts to bring aggregate supply and demand into balance?

The price level and real output.


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


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 is Simple theory of Income Determination?

Total income depends on total employment which depends on effective demand which in turn depends on consumption expenditure and investment expenditure. Consumption depends on income and propensity to consume. Investment depends upon the marginal efficiency of capital and the rate of interest. J. M. Keynes made it clear that the level of employment depends on aggregate demand and aggregate supply. The equilibrium level of income or output depends on the relationship between the aggregate demand curve and aggregate supply curve. As Keynes was interested in the immediate problems of the short run, he ignored the aggregate supply function and focused on aggregate demand. And he attributed unemployment to deficiency in aggregate demand.


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.