Starting from a full-employment equilibrium, an increase in aggregate demand , and creates gap.

1 answer:

5 0

Starting from a full-employment equilibrium, an increase in aggregate demand increases, and creates an inflationary gap.

In an economy, the total quantity of demand for all finished goods and services is measured as aggregate demand. A measure of aggregate demand is the total amount of money spent on certain goods and services at a particular price level and period.

The entire demand for products and services at any given price level throughout a specific period is referred to as aggregate demand in macroeconomics. Since the two indicators are derived in the same way, aggregate demand over the long run equals gross domestic product (GDP). A country's gross domestic product (GDP) reflects all the products and services that are produced there, whereas aggregate demand refers to consumer demand for the same goods.

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Starting from a​ full-employment equilibrium, an increase in aggregate demand​ ______, and creates​ ______ gap.

Starting from a full-employment equilibrium, an increase in aggregate demand , and creates gap.