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When aggregate supply exceeds aggregate demand what will happen to the price level?
The price will go down.
Why does aggregate demand go up when money supply increases?
It doesn't. Money supply has no effect on aggregate demand. Aggregate demand is only effected by the buying power of money, real interest rate, and the real prices of exports and imports. If the supply of money goes up it only causes a short term decrease in the nominal interest rate. The price level is not accompanied by a decrease in the supply of money so the real interest rate does not rise.
Can anyone helps to explain the links between changes in the nations money supply the interest rate investment spending aggregate demand and real GDP and the price level?
An increase in the nation's money supply lowers interest rates, thus decreases the cost of doing business. With a higher return on investment, investment spending increases and so too does aggregate supply. As aggregate supply increases, aggregate demand increases and so prices go up. Thus real GDP and APL increase.
What happens when inflation falls?
Supply & Demand, EconomicsEconomic studies tell us that when the price of a good drops, demand will rise. Furthermore, when the price of a good rises, demand will go down.
What happens to the secondary market when the fed buys treasury bonds?
Prices tend to go up as demand has increased.
When aggregate supply exceeds aggregate demand what will happen to the price level?
The price will go down.
What happens to the real rate of interest when the demand for capital increases because technology innovations have caused the aggregate investment opportunity set to increase?
Anytime the demand for capital increases, interest rates go up. Supply and demand. The price of money is measured in interest rates.
What happens if you dont pay your taxes?
You go to jail
Why does aggregate demand go up when money supply increases?
It doesn't. Money supply has no effect on aggregate demand. Aggregate demand is only effected by the buying power of money, real interest rate, and the real prices of exports and imports. If the supply of money goes up it only causes a short term decrease in the nominal interest rate. The price level is not accompanied by a decrease in the supply of money so the real interest rate does not rise.
What happens to taxes when the government increases spending?
they go up
When demand decreases and supply decreases what happens?
prices go higher
Can anyone helps to explain the links between changes in the nations money supply the interest rate investment spending aggregate demand and real GDP and the price level?
An increase in the nation's money supply lowers interest rates, thus decreases the cost of doing business. With a higher return on investment, investment spending increases and so too does aggregate supply. As aggregate supply increases, aggregate demand increases and so prices go up. Thus real GDP and APL increase.
What happens when the price of a good drops?
Supply & Demand, EconomicsEconomic studies tell us that when the price of a good drops, demand will rise. Furthermore, when the price of a good rises, demand will go down.
What happens when inflation falls?
Supply & Demand, EconomicsEconomic studies tell us that when the price of a good drops, demand will rise. Furthermore, when the price of a good rises, demand will go down.
What happens to the secondary market when the fed buys treasury bonds?
Prices tend to go up as demand has increased.
What usually happens to prices when there is great demand for a product?
if a high demand of a product when it is commen (ex: tooth brushes) it would go down. if its uncommen (ex: solid gold tooth brushes) it would go up
What happens when demand rises by more than supply rises?
Then more people will be employed and the unemployment rates will go down
