ECONOMICS
AGGREGATE DEMAND
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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decrease the quantity of aggregate output supplied in the short-run
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decrease aggregate demand
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increase the quantity of aggregate output demanded
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increase short-run aggregate supply
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Detailed explanation-1: -Lower energy prices decrease the overall cost of production and cause an increase in aggregate supply. This means that changes in energy prices affect the ability of the business sector to produce and supply real production in the short run.
Detailed explanation-2: -The Short-Run Aggregate Supply Curve (SRAS) The SRAS curve shows that as the price level increases and you move along the SRAS, the amount of real GDP that will be produced in an economy increases. An increase in the SRAS is shown as a shift to the right.
Detailed explanation-3: -An increase in the price of natural resources or any other factor of production, all other things unchanged, raises the cost of production and leads to a reduction in short-run aggregate supply.
Detailed explanation-4: -The aggregate supply curve shifts to the left as the price of key inputs rises, making a combination of lower output, higher unemployment, and higher inflation possible.
Detailed explanation-5: -Changes in resource prices. If the price of oil and other factors of production decrease (those that are not sticky) then firms will seek to produce more. Technology changes. Expectation of future prices.