ECONOMICS
AGGREGATE DEMAND
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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the inflation rate and the level of aggregate output supplied.
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the inflation rate and the level of inputs.
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the wage rate and the level of employment.
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the level of inputs and aggregate output.
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Detailed explanation-1: -The Aggregate Supply Curve The aggregate supply curve shows the relationship between the aggregate price level and the quantity of aggregate output supplied in the economy.
Detailed explanation-2: -Aggregate supply is the total quantity of output firms will produce and sell-in other words, the real GDP. The upward-sloping aggregate supply curve-also known as the short run aggregate supply curve-shows the positive relationship between price level and real GDP in the short run.
Detailed explanation-3: -Definition: The short-run aggregate supply (SRAS) curve shows the relationship between the aggregate price level and the quantity of aggre-gate output supplied that exists in the short run, the period when many production costs can be taken as fixed.
Detailed explanation-4: -This is a negative relationship, meaning that as the price level increases, the quantity of aggregate output demanded decreases and vice versa. The AD curve is a downward-sloping curve for this reason.