Inflation.
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.
rises as price level falls
Prices rise, output rises
When aggregate demand increases, GDP typically rises as businesses respond to higher consumer spending by producing more goods and services. Conversely, if aggregate supply increases, GDP can also rise, leading to economic growth without necessarily causing inflation. However, if aggregate demand decreases while aggregate supply remains unchanged, GDP will likely fall, indicating a contraction in economic activity. Overall, changes in either aggregate supply or demand can significantly impact GDP, influencing economic performance and stability.
Inflation.
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.
rises as price level falls
Prices rise, output rises
When aggregate demand increases, GDP typically rises as businesses respond to higher consumer spending by producing more goods and services. Conversely, if aggregate supply increases, GDP can also rise, leading to economic growth without necessarily causing inflation. However, if aggregate demand decreases while aggregate supply remains unchanged, GDP will likely fall, indicating a contraction in economic activity. Overall, changes in either aggregate supply or demand can significantly impact GDP, influencing economic performance and stability.
rises as price level falls
rises as price level falls
It rises.
Shortage will occur.
Then more people will be employed and the unemployment rates will go down
When price and quantity demanded rises less than supply rises then shortage of goods create.
A stimulus plan increases aggregate demand by boosting government spending and lowering taxes, which puts more money in the hands of consumers and businesses. This increased spending encourages consumption and investment, leading to higher demand for goods and services. Additionally, direct government investments in infrastructure and public services create jobs, further stimulating economic activity. As aggregate demand rises, it can help drive economic growth and reduce unemployment.