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How would a rise in the business investment affect the aggregate demand curve?
The aggregate demand curve shifts to the right
How would war affect aggregate demand and what happens to output and the price level?
As war is an unexpected factor that impedes the economic growth of a country, it leaves the aggregate demand with no option but a slope negatively downwards in dicating higher price levels.
What effect would a reduction in person income tax have on aggregate demand or aggregate supply?
A reduction in personal income tax would likely increase aggregate demand, as individuals would have more disposable income to spend on goods and services. This increase in consumer spending can stimulate economic growth and boost overall demand in the economy. However, it may have less direct effect on aggregate supply, as supply is more influenced by factors like production capacity and resource availability. In the short term, the primary impact would be on demand, potentially leading to higher economic activity and increased employment.
What is the required change in aggregate demand to bring the economy back to its long-run equilibrium?
To bring the economy back to its long-run equilibrium, the required change in aggregate demand would need to be equal to the difference between the current level of aggregate demand and the level of aggregate demand that corresponds to the long-run equilibrium. This change would need to be sufficient to close the gap between the two levels and restore balance in the economy.
What would increase aggregate demand?
Anything -other than the desired (product/service)'s price- that would change the demand for a product/service would increase aggregate demand. Some examples may be: increased incomes, increased population, increased price of substitute products, etc..
How would a rise in business affect the aggregate demand curve?
The aggregate demand curve shifts to the right
How would a rise in the business investment affect the aggregate demand curve?
The aggregate demand curve shifts to the right
How would a stock market crash affect aggregate demand and GDP?
AD is reduced and so is GDP
How would war affect aggregate demand and what happens to output and the price level?
As war is an unexpected factor that impedes the economic growth of a country, it leaves the aggregate demand with no option but a slope negatively downwards in dicating higher price levels.
What effect would a reduction in person income tax have on aggregate demand or aggregate supply?
A reduction in personal income tax would likely increase aggregate demand, as individuals would have more disposable income to spend on goods and services. This increase in consumer spending can stimulate economic growth and boost overall demand in the economy. However, it may have less direct effect on aggregate supply, as supply is more influenced by factors like production capacity and resource availability. In the short term, the primary impact would be on demand, potentially leading to higher economic activity and increased employment.
What is the required change in aggregate demand to bring the economy back to its long-run equilibrium?
To bring the economy back to its long-run equilibrium, the required change in aggregate demand would need to be equal to the difference between the current level of aggregate demand and the level of aggregate demand that corresponds to the long-run equilibrium. This change would need to be sufficient to close the gap between the two levels and restore balance in the economy.
What would increase aggregate demand?
Anything -other than the desired (product/service)'s price- that would change the demand for a product/service would increase aggregate demand. Some examples may be: increased incomes, increased population, increased price of substitute products, etc..
Why would a tax cut would shift the aggregate demand curve outward showing an increase in aggregate demand?
Personal taxation is a amount taken by the Government or State from an individuals income. A cut in taxes would mean that people effectively have more income, therefore more income can be spent on goods and services. This ability for consumers to spend more means that they will demand more, shifting the aggregate demand curve to the right. It is the same in a business sense. If there was to be tax cuts for businesses, businesses have the ability to spend more in turn increasing aggregate demand. ~MB
What would cause the aggregate demand curve to shift to the right?
The aggregate demand curve will shift to the right as the economy expands. When that happens, the quantity of output demanded for a given price level rises.
What increase aggregate demand?
Anything -other than the desired (product/service)'s price- that would change the demand for a product/service would increase aggregate demand. Some examples may be: increased incomes, increased population, increased price of substitute products, etc..
What would cause an increase in aggregate demand in the short run?
if decrease a price or if the expectation of raising a price
Derive aggregate demand curve from aggregate expenditure model?
an increase in price level would lead to a fall in AE, vice versa. So by plotting those points out, you can derive an AD curve
