aggregate

Examples of aggregate in the following topics:

• Aggregate Expenditure at Economic Equilibrium

  • An economy is said to be at equilibrium when aggregate expenditure is equal to the aggregate supply (production) in the economy.
  • As a result, the economy is always moving towards an equilibrium between the aggregate expenditure and aggregate supply.
  • On the aggregate expenditure model, equilibrium is the point where the aggregate supply and aggregate expenditure curve intersect.
  • The aggregate expenditure equals the aggregate consumption plus planned investment.
  • The aggregate expenditure is the aggregate consumption plus the planned investment (AE = C + I).

• The Relationship Between the Phillips Curve and AD-AD

  • Changes in aggregate demand cause movements along the Phillips curve, all other variables held constant.
  • The Phillips curve and aggregate demand share similar components.
  • The Phillips curve is the relationship between inflation, which affects the price level aspect of aggregate demand, and unemployment, which is dependent on the real output portion of aggregate demand.
  • Let's assume that aggregate supply, AS, is stationary, and that aggregate demand starts with the curve, AD1.
  • As aggregate demand increases from AD1 to AD4, the price level and real GDP increases.

• Graphing Equilibrium

  • An economy is said to be at equilibrium when the aggregate expenditure is equal to the aggregate supply (production) in the economy.
  • The aggregate supply and aggregate demand determine the output and price for goods and services.
  • An economy is said to be at equilibrium when the aggregate expenditure is equal to the aggregate supply (production) in the economy.
  • The aggregate expenditure and aggregate supply adjust each other towards equilibrium.
  • Demonstrate how aggregate demand and aggregate supply determine output and price level by using the AD-AS model

• Macroeconomic Equilibrium

  • In economics, the macroeconomic equilibrium is a state where aggregate supply equals aggregate demand.
  • The aggregate supply determines the extent to which the aggregate demand increases the output and prices of a good or service.
  • When the aggregate supply and aggregate demand shift, so does the point of equilibrium.
  • The aggregate demand curve shifts and the equilibrium point moves horizontally along the aggregate supply curve until it reaches the new aggregate demand point.
  • This graph shows the three stages of aggregate supply.

• Explaining Fluctuations in Output

  • In the short run, output fluctuates with shifts in either aggregate supply or aggregate demand; in the long run, only aggregate supply affects output.
  • The level of output is determined by both the aggregate supply and aggregate demand within an economy.
  • In the long-run, the aggregate supply curve and aggregate demand curve are only affected by capital, labor, and technology.
  • The aggregate supply curve is vertical which reflects economists' belief that changes in aggregate demand only temporarily change the economy's total output.
  • This AS-AD model shows how the aggregate supply and aggregate demand are graphed to show economic output.

• Introducing Aggregate Supply

  • In the short-run, the aggregate supply is graphed as an upward sloping curve.
  • In the long-run, the aggregate supply is graphed vertically on the supply curve.
  • The equation used to determine the long-run aggregate supply is: Y = Y*.
  • The long-run aggregate supply curve is vertical which reflects economists' beliefs that changes in the aggregate demand only temporarily change the economy's total output.
  • The long-run aggregate supply curve is static because it is the slowest aggregate supply curve.

• The Slope of the Long-Run Aggregate Supply Curve

  • The long-run aggregate supply curve is perfectly vertical; changes in aggregate demand only cause a temporary change in total output.
  • The long-run aggregate supply curve is static because it shifts the slowest of the three ranges of the aggregate supply curve.
  • The long-run aggregate supply curve is perfectly vertical, which reflects economists' belief that the changes in aggregate demand only cause a temporary change in an economy's total output .
  • The equation used to calculate the long-run aggregate supply is: Y = Y*.
  • This graph shows the aggregate supply curve.

• Reasons for and Consequences of Shift in Aggregate Demand

  • A short-run shift in aggregate demand can change the equilibrium price and output level.
  • The aggregate supply-aggregate demand model uses the theory of supply and demand in order to find a macroeconomic equilibrium.
  • The shape of the aggregate supply curve helps to determine the extent to which increases in aggregate demand lead to increases in real output or increases in prices.
  • An increase in any of the components of aggregate demand shifts the AD curve to the right.
  • The aggregate demand curve shifts to the right as a result of monetary expansion.

• Defining Aggregate Expenditure: Components and Comparison to GDP

  • In economics, aggregate expenditure is the current value of all the finished goods and services in the economy.
  • The equation for aggregate expenditure is: AE = C + I + G + NX.
  • An economy is at equilibrium when aggregate expenditure is equal to the aggregate supply (production) in the economy.
  • Instead, the aggregate expenditure and aggregate supply adjust each other toward equilibrium.
  • This graph shows the aggregate expenditure model.

• The Impact of Monetary Policy on Aggregate Demand, Prices, and Real GDP

  • Changes in a country's money supply shifts the country's aggregate demand curve.
  • This brings us to the aggregate demand  curve.
  • The aggregate demand curve illustrates the relationship between two factors - the quantity of output that is demanded and the aggregated price level.
  • The aggregate demand curve assumes that money supply is fixed.
  • This decrease will shift the aggregate demand curve to the left.