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Macroeconomic cost of unemployment
There is a direct proportional relationship between aggregate expenditure and real GDP. Aggregate expenditure is actually equal to real GDP. This is different from the planned expenditure.
The equilibrium price level increases, but the real GDP change depends on how much aggregate demand and aggregate supply change by.
real GDP inflation unemployment
inventories will increase and real GDP will decline.
There is a direct proportional relationship between aggregate expenditure and real GDP. Aggregate expenditure is actually equal to real GDP. This is different from the planned expenditure.
Macroeconomic cost of unemployment
The equilibrium price level increases, but the real GDP change depends on how much aggregate demand and aggregate supply change by.
The equilibrium price level increases, but the real GDP change depends on how much aggregate demand and aggregate supply change by.
The equilibrium price level increases, but the real GDP change depends on how much aggregate demand and aggregate supply change by.
inventories will increase and real GDP will decline.
real GDP inflation unemployment
Macroeconomic factors are the factors which affect the wider economy. In other words these factors seems to summarize the picture of economy. For example, unemployment, inflation rates, GDP etc. All these tell us about the story of whole economy.
Why doesn't an increase in aggregate demand translate directly into an increase in real GDP
How does the leakages and injections in the aggregate expenditure model influence the level of GDP of an economy?
The aggregate expenditure model relates aggregate expenditures, which is the sum of planned level of consumption + investment + government purchases + net exports at a given price level, to the level of GDP. The key word here is planned. GDP is the same as aggregate expenditures(AE) except for one difference. People, firms and governments don't always spend what they had planned. So AE differs from GDP in that it deals exclusively with amounts firms intend to invest, and not necessarily taking into account amounts that will actually be invested as in GDP Where GDP is defined as C + I + G + NX and I = Ip + Iu (planned + unplanned investment), Aggregate Expenditures is defined as C + Ip + G + NX. AE (Aggregate Expenditure) is used in conjunction with GDP in the Aggregate Expenditures Model to predict future GDP direction. In this model, when AE = GDP then the economy is in equilibrium. According to this model an economy will move towards its equilibrium causing changes in the GDP.
AD is reduced and so is GDP