Aggregate demand and aggregate supply project

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Aggregate demand and aggregate supply project

Posted by Shruti Gupta 4 years, 9 months ago

CBSE > Class 12 > Economics

1 answers

Gaurav Seth 4 years, 9 months ago

The Slope of the Aggregate Demand Curve

We will use the implicit price deflator as our measure of the price level; the aggregate quantity of goods and services demanded is measured as real GDP. The table in <a href="https://saylordotorg.github.io/text_principles-of-economics-v2.0/s25-aggregate-demand-and-aggregate.html#rittenmacro-ch07_s01_s01_f01">Figure 22.1 "Aggregate Demand"</a> gives values for each component of aggregate demand at each price level for a hypothetical economy. Various points on the aggregate demand curve are found by adding the values of these components at different price levels. The aggregate demand curve for the data given in the table is plotted on the graph in <a href="https://saylordotorg.github.io/text_principles-of-economics-v2.0/s25-aggregate-demand-and-aggregate.html#rittenmacro-ch07_s01_s01_f01">Figure 22.1 "Aggregate Demand"</a>. At point A, at a price level of 1.18, $11,800 billion worth of goods and services will be demanded; at point C, a reduction in the price level to 1.14 increases the quantity of goods and services demanded to $12,000 billion; and at point E, at a price level of 1.10, $12,200 billion will be demanded.

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