Get the answer of: What is Aggregate Demand? National output or GNP as also the general price level are determined by the interplay of aggregate demand and aggregate supply. This means that the total production of a country is determined partly by aggregate demand and partly by aggregate supply. Aggregate demand refers to the quantity of goods and services that [...]
The below mentioned article provides short notes on the Effect of Shift in Aggregate Demand. We may now examine the effects of a shift in aggregate demand curve due to any change in government policy such as an unexpected increase in the money supply by the central bank. In the short run as the economy moves from point E to [...]
The following points highlight the three Economic Policies under Fixed Exchange Rate. The Economic Policies are: 1. Fiscal Policy 2. Monetary Policy 3. Trade Policy. Economic Policy # 1. Fiscal Policy: It is interesting to note that, in the Mundell-Fleming model, an expansionary fiscal policy leads to an increase in the domestic money supply. Thus, we find a fiscal-monetary link. [...]