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| Topic: |
Business
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| Number of pages / Number of words: |
3 / 628 |
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For example, if consumers become more optimistic they will start to spend more. This will raise consumption and hence aggregate demand. If there is spare capacity in the economy this will raise output which in turn is likely to increase employment. The effect on the price level will depend on whether firms can obtain more resources without bidding up their prices...
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This will raise consumption and hence aggregate demand. If there is spare capacity in the economy this will raise output which in turn is likely to increase employment. The effect on the price level will depend on whether firms can obtain more resources without bidding up their prices.
EFFECT OF A CHANGE IN AGGREGATE DEMAND:-
If consumption or any of the other components of aggregate demand, increases by, for example, ?30m the final effect on total spending will be greater...
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DETERMINATION OF OUTPUT, EMPLOYMENT AND PRICE
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