Question

Consider the different characteristics of the aggregate demand curve the statements below, determine which curve is being described and place the description into the proper bin. and the short-run aggregate supply curve. For each of Aggregate demand Short-run aggregate supply Answer Bank Real GDP that firms produce at various price levels Upward-sloping ls Upward-sloping Shifts when productivity changes Output of goods and services demanded at different price levels Downward-sloping Shifts when consumner wealth changes Shifts when the cost of oil changes significantly

Answer 1

Aggregate Demand:

4. Output of goods and services demanded at different price levels

5. Downward Sloping

6. Shifts when consumer wealth changes.

Aggregate demand or domestic final demand is the total demand for final goods and services in an economy at a given time.

Short run aggregate Supply::

1. Real GDP that firms produce at various price levels

2. Upward Sloping

3. Shifts when productivity changes

7. Shifts when the cost of oil changes significantly

The short-run aggregate supply curve is affected by production costs including taxes, subsides, price of labor (wages), and the price of raw materials.