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What are the factors that would affect the aggregate demand?
Consumption, investment, government spending, net exports, and aggregate expenditures.
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.
What happens to aggregate demand if business tax rises?
If business taxes rise, aggregate demand typically decreases. Higher taxes reduce the after-tax profits of businesses, which may lead them to cut back on investment and spending. Additionally, businesses may pass on some of the tax burden to consumers through higher prices, further dampening consumer spending. Overall, reduced investment and consumer spending can lead to a decline in aggregate demand.
What are Business cycles are linked to the interaction between?
the aggregate demand and aggregate supply curves.
How would a rise in business 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 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.
What are Business cycles are linked to the interaction between?
the aggregate demand and aggregate supply curves.
Can anyone helps to explain the links between changes in the nations money supply the interest rate investment spending aggregate demand and real GDP and the price level?
An increase in the nation's money supply lowers interest rates, thus decreases the cost of doing business. With a higher return on investment, investment spending increases and so too does aggregate supply. As aggregate supply increases, aggregate demand increases and so prices go up. Thus real GDP and APL increase.
What are the factor affecting aggregate Demand?
Consumption, Investment, Government Expenditure and Net Exports
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.
Because tax cuts will likely affect both aggregate demand and aggregate supply does it matter which is affected more?
Because a tax increase will cause consumption to decrease, an aggregate demand has a greater effect.
What is the definition of demand side policy?
Policies designed to affect aggregate demand: fiscal policy and monetary policy.
What is the difference between aggregate expenditure and aggregate demand?
Aggregate expenditure refers to the total amount of spending in an economy, including consumption, investment, government spending, and net exports. Aggregate demand, on the other hand, represents the total quantity of goods and services that households, businesses, and the government are willing and able to buy at different price levels. In essence, aggregate expenditure is the total spending in an economy, while aggregate demand is the total demand for goods and services at various price levels.
What make a shift in the aggregate demand curve?
An increase or decrease in consumption, investment, government expenditure or net exports
