Aggregate Supply and Demand

Front

What are some factors that can affect aggregate supply?

Back

Changes in input prices, productivity, technology, government regulations, and external shocks.

Front

List the determinants of aggregate demand.

Back

Consumption, Investment, Government Spending, Net Exports

Front

Explain how a change in technology can shift the aggregate supply curve.

Back

A change in technology can shift the aggregate supply curve by affecting the productivity of resources.

Front

Describe what causes movement along the aggregate demand curve.

Back

Changes in the price level

Front

How does government regulation impact aggregate supply?

Back

Government regulation can impact aggregate supply by affecting production costs, technology adoption, and overall business environment. For example, regulations that increase costs or restrict production can decrease aggregate supply, while regulations that promote innovation and efficiency can increase aggregate supply.

Front

Discuss the effect of consumer confidence on aggregate demand.

Back

Consumer confidence affects aggregate demand by influencing consumer spending behavior.

Front

Illustrate how an increase in wages affects aggregate supply.

Back

An increase in wages negatively affects aggregate supply by causing a leftward shift in the short-run aggregate supply curve.

Front

What role does interest rates play in determining aggregate demand?

Back

Interest rates influence borrowing costs, affecting spending behavior and ultimately impacting aggregate demand.

Front

Explain the concept of a negative supply shock and its effect on the aggregate supply curve.

Back

A negative supply shock reduces the production capacity of an economy, leading to a leftward shift of the aggregate supply curve.

Front

Describe a scenario where there is a movement along the aggregate demand curve.

Back

A movement along the aggregate demand curve happens due to a change in the price level, leading to a change in the quantity of real GDP demanded.