6 questions on "Aggregate Demand and Aggregate Supply - Aggregate Demand"
for the whole economy.
the aggregate output demanded by the firms, the government and the rest of the world.
- The curve is downward sloping indicating a negative relationship between the aggregate price level and and the quantity of aggregate output demanded
- due to
- to the wealth effect, of a change in the aggregate price level,
- to the Interest rate effect of a change in the aggregate price level.
- to the interest rate effect of a change in the aggregate price level
- For the demand curve the demand for a good is downward sloping because of an increase in price of a good makes it more expensive to by thus decreasing demand
- However, the AD is sloped downwards because of a simultaneous change in price of ALL final goods and services, and changes in the composition of goods and services in consumer spending aren't relevant to the aggregate demand curve
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