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The aggregate supply curve show the relationship between price level and the quantity of goods and services that producers are willing to produce when their goods are at a certain price.

On the x-axis is RGDP (representing quantity of goods that suppliers are willing to produce in terms of the value of the products adjusted for inflation). On the Y-axis is price level.

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Fiscal and monetary policies are used to shift the aggregate supply curve or the aggregate demand curve?

Aggregate demand curve.


Aggregate demand and Aggregate supply curve?

The aggregate demand curve show what consumers are willing to buy at a given price level, whereas the aggregate supply curve shows what producers are willing to produce at a given price level.


Why the aggregate supply curve has its particular shape?

The aggregate supply curve is positively sloped because at a higher price level, producers are more willing to supply more real output.


Ceteris paribus the price level will fall when A The aggregate supply curve shifts to the left B The aggregate demand curve shifts to the left C The aggregate demand curve shifts to the right?

b


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


In which range of the aggregate supply curve is the price level constant?

Horizontal.


What is aggregate shock?

In economics, the supply curve in the aggregate supply and demand model shifts drastically to the left due to an inadequacy of resources or because the demand overpowers the supply.


What happens to the income multiplier if the aggregate supply curve is vertical?

the multiplier is zero.


What factors cause a shift to the right in the aggregate supply curve?

ask your mom!


Why is the short-run aggregate supply curve horizontal if?

The short-run aggregate supply curve is horizontal if the economy is operating below full capacity, meaning there are unused resources like labor and capital. This indicates that firms can increase production without raising prices, resulting in a flat supply curve.


As GDP increases on the horizontal axis of your aggregate supply aggregate demand graph what is happening to the rate of unemployment?

it increases


Aggregate supply curve is perfectly inelastic an increase in agregate demand will lead to?

Inflation.