ECONOMICS
AGGREGATE DEMAND
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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RNO that is purchased at each PL, per time period
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Positive correlation between NO and the general PL
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NNO that is purchased at each PL, per time period
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Negative correlation between production costs and RNO
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Detailed explanation-1: -An aggregate demand curve shows the total spending on domestic goods and services at each price level.
Detailed explanation-2: -The LRAS curve represents a point on an economy’s production possibilities curve (PPC). Remember that the PPC represents the maximum output that can be produced given scarce resources. The economy grows if the PPC shifts outward because of more/better resources or technological advances.
Detailed explanation-3: -The aggregate demand curve: shows the amount of real output that will be purchased at each possible price level. The aggregate demand curve is: downsloping because of the interest-rate, real-balances, and foreign purchases effects.
Detailed explanation-4: -long-run aggregate supply (LRAS) a curve that shows the relationship between price level and real GDP that would be supplied if all prices, including nominal wages, were fully flexible; price can change along the LRAS, but output cannot because that output reflects the full employment output.