AD places a crucial role in determining the level of national output in an economy.
Although Monetarists will argue it is AS which will determine the long run trend rate of growth. In this case, there is a shift in the SRAS e.
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All inputs are greatly appreciated. Your email address will not be published. Leave this field empty. Why does AD slope downwards?
At a lower price level, consumers are likely to have higher disposable income and therefore spend more. Primewritings review this assumes that wages are constant and not economics homework answers level c with prices If there is a lower price level economics homework answers level c the UK, UK economics homework answers level c will become relatively more competitive, leading to higher exports.
Exports is a component of AD so AD will be higher. At a lower price level, interest rates usually fall, and this causes higher aggregate demand. Related Why is AD downward sloping?
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