Policymakers who manage monetary and fiscal policy and desire to offset the impacts on output of an economic contraction forced by a shift in aggregate supply could use policy to shift Aggregate demand to the right.
<h3>What is Aggregate demand?</h3>
Aggregate demand or domestic final demand exists as the total demand for final goods and services in an economy at a provided time. It is often named effective demand, though at other moments this term stands distinguished. This exists the demand for the gross domestic product of a country. Aggregate demand exists as a phrase used in macroeconomics to represent the total demand for goods produced domestically, including consumer goods, services, and capital goods.
Aggregate demand exists as the total amount of goods and services in an economy that consumers stand willing to expend within a certain period. Aggregate demand is estimated as the sum of consumer spending, investment spending, government spending, and the distinction between exports and imports. Aggregate supply exists as the total quantity of output firms will produce and sell—in other terms, the real GDP. The upward-sloping total supply curve—also understood as the short-run aggregate supply curve—demonstrates the positive connection between the price level and real GDP in the short run.
Hence, Policymakers who manage monetary and fiscal policy and desire to offset the impacts on output of an economic contraction forced by a shift in aggregate supply could use policy to shift Aggregate demand to the right.
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