If the government wants to expand aggregate demand, it can "rebate" government purchases or "cut" taxes.
<h3>What is aggregate demand?</h3>
The total quantity of demand for all finished products and services generated in an economy is measured as aggregate demand.
Some characteristics of aggregate demand are-
- The total amount of money spent on those goods and services at a particular price level and time is known as aggregate demand.
- The correlation between output and all prices can be seen on an aggregate demand curve.
- In the end, the aggregate demand curve slopes downward because it predicts a fall in real gross domestic product (GDP) as prices rise.
- Consumer spending, investment spending, government spending, and the difference between exports and imports are all added together to determine aggregate demand.
- When one of these variables changes but the overall supply stays unchanged, aggregate demand will alter.
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Answer:
Contraction:
Explanation:
The contraction period is the time between the peak (highest growth rate) and the trough ( the lowest growth rate). At contraction, the GDP value declines from its peak to the lowest or negative growth rate. Contraction means a shrink in economic activities.
During contraction, the unemployment rate rising as employers lay-off workers due to reduced demand. Incomes and profits decline, and the GDP value decreases to low or negative values. The contraction period starts with a recession, which is a decline in GDP value for two consecutive quarters.
Pay discrepancies i believe