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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 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.
What is aggregate demand and what are the factors that affect aggregate demand?
nothing
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
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 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.
What is aggregate demand and what are the factors that affect aggregate demand?
nothing
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
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.
Fiscal and monetary policies are used to shift the aggregate supply curve or the aggregate demand curve?
Aggregate demand curve.
What does aggregate demand mean?
Aggregate demand refers to the total demand for all goods and services in an economy at a given overall price level and within a specific time frame. It encompasses consumption by households, investment by businesses, government spending, and net exports (exports minus imports). Changes in aggregate demand can influence economic growth, inflation, and employment levels. It is a key concept in macroeconomics used to analyze economic performance.
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 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 is The total demand for goods and services in an economy known as?
The total demand for goods and services in an economy is known as aggregate demand. It represents the total amount of expenditure on the economy's output at a given price level and includes consumption, investment, government spending, and net exports. Aggregate demand is a crucial concept in macroeconomics, as it helps analyze economic performance and the effects of fiscal and monetary policies.
How would a rise in business affect the aggregate demand curve?
The aggregate demand curve shifts to the right
