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What factors change and what factors remain the same when there is a movement along the aggregate demand curve?
The aggregate demand curve shows the relationship between the quantity of real GDP demanded and the
price level when other influences on expenditure plans remain the same. When there is a movement along
the aggregate demand curve, the price level changes and other factors such as expectations, fiscal and
monetary policy, and the world economy remain the same
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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.
What will happen to the equilibrium price level and the real GDP if the aggregate demand decreases and aggregate supply decreases?
The equilibrium price level increases, but the real GDP change depends on how much aggregate demand and aggregate supply change by.
What factors influence the relationship between the total demand for output and the aggregate demand curve?
Several factors can influence the relationship between total demand for output and the aggregate demand curve. These factors include changes in consumer spending, investment levels, government spending, and net exports. Additionally, factors such as interest rates, inflation, and overall economic conditions can also impact the aggregate demand curve.
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
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 factors influence the relationship between the total demand for output and the aggregate demand curve?
Several factors can influence the relationship between total demand for output and the aggregate demand curve. These factors include changes in consumer spending, investment levels, government spending, and net exports. Additionally, factors such as interest rates, inflation, and overall economic conditions can also impact the aggregate demand curve.
What will happen to the equilibrium price level and the real GDP if the aggregate demand increases and aggregate supply decreases?
The equilibrium price level increases, but the real GDP change depends on how much aggregate demand and aggregate supply change by.
What will happen to the equilibrium price level and the real GDP if the aggregate demand decreases and aggregate supply decreases?
The equilibrium price level increases, but the real GDP change depends on how much aggregate demand and aggregate supply change by.
What will happen to the equilibrium price level and the real GDP if the aggregate demand decreases and aggregate supply increases?
The equilibrium price level increases, but the real GDP change depends on how much aggregate demand and aggregate supply change by.
What are the factors that would affect the aggregate demand?
Consumption, investment, government spending, net exports, and aggregate expenditures.
How much does aggregate demand need to change in order to restore the economy to its long-run equilibrium?
Aggregate demand needs to change enough to close the output gap and bring the economy back to its long-run equilibrium level. This typically involves increasing aggregate demand to stimulate economic growth and reduce unemployment, or decreasing aggregate demand to prevent inflation and overheating.
How does a change in demand differ from a change in quantity demanded?
A change in demand refers to a shift in the entire demand curve due to factors like income or preferences, while a change in quantity demanded is a movement along the demand curve caused by a change in price.
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.
Does a change in price level shift the aggregate demand curve?
Yes
How does a change in demand differ from a change in quantity demanded in the context of economics?
A change in demand refers to a shift in the entire demand curve, caused by factors like income or preferences. A change in quantity demanded is a movement along the demand curve due to a change in price.
