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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..
What would cause an increase in aggregate demand in the short run?
if decrease a price or if the expectation of raising a price
How would a rise in the business investment affect the aggregate demand curve?
The aggregate demand curve shifts to the right
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
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
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..
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
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
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
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
When demand rises and supply remains the same equilibrium price will... and equilibrium quantity will?
If aggregate demand rises and aggregate supply remains the same, the quantity supplied which increase. Consequently, the equilibrium price will increase, as will the equilibrium quantity. LOOK AT LINK BELOW: http://upload.wikimedia.org/wikipedia/en/thumb/e/eb/Supply-demand-right-shift-demand.svg/240px-Supply-demand-right-shift-demand.svg.png As you can see, if demand increased from D1 to D2, the price level would increase from P1 to P2, and the output would increase from Q1 to Q2. Hope this helps!
What effects would the expectation of rapid inflation have on aggregate demand?
since you are assuming that the price value of money will increase you will spend more money now then later... thus, causing AD to increase
What economic system did Keynes believe in?
Keynes' main focus was toward Aggregate Demand. His belief was that an increase or decrease in spending would solve any problem.
What are the factors that would affect the aggregate demand?
Consumption, investment, government spending, net exports, and aggregate expenditures.
In which situation would the price of a good most likely increase?
A rise in demand happens to quickly for produces to increase production to keep up.
