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2 years ago

He economy experiences an increase in the price level and an increase in real domestic output. which is a likely explanation?

Business

1 answer:

-Dominant- [34]2 years ago

6 0

Aggregate demand will fall, real production will fall, but the price level will remain the same.

Rising prices usually indicate that companies need to expand production to meet higher aggregate demand. if supply remains constant and demand increases, consumers will compete for available goods and pay higher prices. this dynamic is pushing companies to increase production and sell more goods.

The intuition behind the real wealth effect is that the lower the price level, the less money you need to buy goods and services. the money you have is now more valuable and you feel richer. therefore, real GDP increases in response to lower price levels.

In the middle part of the AS curve, the higher the price level of output, the higher the output continues to grow, but the steeper the slope of the aggregate supply curve shows, the higher the price, the higher the quantity. the levels are not that big.

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galina1969 [7]

Answer:

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Explanation:

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Answer:

C. Simple interest.

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3 years ago

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pychu [463]

Answer:

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Answer:

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