AE is also used in the aggregate demand-aggregate supply model which advances the aggregate expenditures model with the inclusion of price changes.
22.
Aggregate supply is targeted by government " supply side policies " which are meant to increase productive efficiency and hence national output.
23.
In short, inflation is a real phenomenon brought about by a rise in real aggregate demand over and above real aggregate supply.
24.
Short-run fluctuations may also be related to monetary factors, but changes in aggregate demand and aggregate supply can also influence price level.
25.
However, the Keynesian aggregate supply curve also contains a normally upward-sloping region where aggregate supply responds accordingly to changes in price level.
26.
However, the Keynesian aggregate supply curve also contains a normally upward-sloping region where aggregate supply responds accordingly to changes in price level.
27.
Likewise, the supply curves of all the individual workers ( mentioned above ) can be summed to obtain the aggregate supply of labour.
28.
The shortage of labour produces the rise of wage rates, which makes the short-run aggregate supply decrease, until it reaches the full-employment level.
29.
In the short run, an economy-wide positive supply shock will shift the aggregate supply curve rightward, increasing output and decreasing the price level.
30.
These include distinctions between the short term and the long term, between the cyclical and the structural, and between aggregate demand and aggregate supply.
