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How to calculate aggregate demand curve short-run macroeconomics?
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What is the study of the nation's economy?
Macroeconomics is the study of a nation's economy. (Aggregate demand, aggregate supply, GDP, economics growth, inflation etc are all terms used in macroeconomics to describe one economy on its own)
What is meant by aggregate demand and aggregate supply?
Aggregate simply means a collection of things. So aggregate demand is the total quantity of an economy's final good and services demanded at different price levels. Aggregate supply is the total quantity of final goods and services that firms in the economy want to sell at different price levels. These are used primarily in Macroeconomics to calculate how the economy is doing as a whole.
What are the characteristics of macroeconomics?
Macroeconomics deals with studying the behavior, decision making, performance and structure of an economy as a whole instead of its component parts. Macroeconomics usually studies the aggregate supply/aggregate demand model, using it to explain the performance of the GDP of a nation based on the various components.
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.
What is equilibrium output?
It is the output of an economy that equates aggregate supply with aggregate demand.
What is the study of the nation's economy?
Macroeconomics is the study of a nation's economy. (Aggregate demand, aggregate supply, GDP, economics growth, inflation etc are all terms used in macroeconomics to describe one economy on its own)
What is meant by aggregate demand and aggregate supply?
Aggregate simply means a collection of things. So aggregate demand is the total quantity of an economy's final good and services demanded at different price levels. Aggregate supply is the total quantity of final goods and services that firms in the economy want to sell at different price levels. These are used primarily in Macroeconomics to calculate how the economy is doing as a whole.
What are the characteristics of macroeconomics?
Macroeconomics deals with studying the behavior, decision making, performance and structure of an economy as a whole instead of its component parts. Macroeconomics usually studies the aggregate supply/aggregate demand model, using it to explain the performance of the GDP of a nation based on the various components.
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.
What is equilibrium output?
It is the output of an economy that equates aggregate supply with aggregate demand.
The demand and supply conditions of a product are represented by the following equations Aggregate Demand Q equals 15-0.3P Aggregate Supply Q equals 5- 0.1P Calculate the equilibrium price?
aggregate demance=Q=15-0.3p and aggregate supply =5-0.1p calculate the equlibrium price
What is aggregate demand and what are the factors that affect aggregate demand?
nothing
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.
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
How is the equilibrium between price and quantity established?
In both micro and macroeconomics, the equilibrium level of price and quantity are determined by looking at the supply and demand curves (aggregate demand and aggregate supply curves in the case of macroeconomics). The supply and demand curves' steepness and position are established by specific determinants (there are both determinants of supply and determinants of demand). However, these two graphs don't immediately tell you the quantity and price of a good, or aggregate goods in an aggregate market. By looking at the intersection of these two graphs, you can establish the price and quantity. Drawing a vertical line from the intersection, you will arrive at the quantity that is demanded and should be supplied (equilibrium quantity). And drawing a horizontal line from the intersection will give you the price the supplier should charge and what people are willing to pay (equilibrium price).
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.
