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AGGREGATE DEMAND AND AGGREGATE SUPPLY, aggregate demand curve, Scenario :…
AGGREGATE DEMAND AND AGGREGATE SUPPLY
aggregate demand
The aggregate-demand curve shows the quantity of goods and services that households, firms, and the government want to buy at each price level.
aggregate supply
The aggregate-supply curve shows the quantity of goods and services that firms choose to produce and sell at each price level.
long run aggregate supply curve
The long-run aggregate-supply curve is vertical at the natural rate of output
Any change in the economy that alters the natural rate of output shifts the long-run aggregate-supply curve.
Shifts might arise from changes in:
-Labor
-Capital
-Natural Resources
-Technological Knowledge
short run aggregate supply curve
An increase in the overall level of prices in the economy tends to raise the quantity of goods and services supplied.
A decrease in the level of prices tends to reduce the quantity of goods and services supplied. As a result, the short-run aggregate-supply curve is upward sloping.
Figure of Aggregate Demand and Aggregate Supply
AGGREGAT DEMAND DECREASE
Price ⬆️
Real value money ⬇️
Consumer wealth ⬇️
Spending ⬇️
Quantity of good and service demand ⬇️
Aggregate demand ⬇️
aggregate demand curve
Scenario : Price of foods increase in the market
