Aggregate demand and aggregate supply

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Reference no: EM131386142

Assume that:

(a) the price level is flexible upward  and  downward and

(b) the economy is currently operating at its full-employment output.

How will each of the following changes in AD and / or AS affect the equilibrium price level  and real output (GDP or Q) in the short run? (Other things constant, table your answers using +,-,=)

a. An increase in aggregate demand.

b. A decrease in aggregate supply, with no change in aggregate demand.

c. Equal increases in aggregate demand and aggregate supply.

d. A decrease in aggregate demand.

e. An increase in aggregate demand that exceeds an increase in aggregate supply.

Reference no: EM131386142

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