ECONOMICS
AGGREGATE DEMAND
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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the short-run aggregate supply curve shifts right, output increases, and prices decrease
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the short-run aggregate supply curve shifts left, output decreases, and prices increase
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the aggregate demand curve shifts left, output decreases, and prices decrease
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the aggregate demand curve shifts right, output increases, and prices increase
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Detailed explanation-1: -Answer and Explanation: The aggregate supply would be most possible to increase when the increase in productivity is there, and it increases the aggregate demand curve.
Detailed explanation-2: -Changes in prices of factors of production shift the short-run aggregate supply curve. In addition, changes in the capital stock, the stock of natural resources, and the level of technology can also cause the short-run aggregate supply curve to shift.
Detailed explanation-3: -The correct option is: a. A decrease in the price level, which reduces interest rates. With the fall in the interest rates in the economy, the borrowings will become cheaper and this would lead to an increase in the investment spendings and this would increase the aggregate demand in the economy.
Detailed explanation-4: -Which of the following best describes the effect on the aggregate supply curve if political negotiations result in a substantial decrease in the price of oil? The AS curve shifts rightward.