What's it: An adverse economic shock is a sudden, unexpected, and dramatic change in aggregate supply and demand, hurting the economy. For
Aggregate Demand
Economic Shock: Types, Causes, Impacts
What's it: An economic shock is a sudden and unexpected significant change in an economy's output due to changes in external factors. Shocks
Long-Run Macroeconomic Equilibrium and Its Explanation
What's it: Long-run macroeconomic equilibrium occurs when the aggregate demand curve intersects the short-run aggregate supply curve at the point
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Short-run Macroeconomic Equilibrium and Its Implications for the Economy?
What's it: A short-run macroeconomic equilibrium occurs when the aggregate demand curve and the short-run aggregate supply curve intersect. It
How Exchange Rates Affect Aggregate Demand and the Economy
Exchange rates affect aggregate demand through their effects on exports and imports. Specifically, it affects the relative prices of imported or
How Monetary Policy Works Affects Aggregate Demand and the Economy
Monetary policy affects aggregate demand and the economy through the money supply. For example, an increase in the money supply
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How Fiscal Policy Affects Aggregate Demand and the Economy
Fiscal policy affects aggregate demand and economic activity through taxes and government spending changes. For example, tax cuts increase aggregate
How Household Wealth Affects Aggregate Demand and the Economy
Household wealth influences the decision to spend money, impacting aggregate demand. This has a significant impact on the economy, especially where
Induced Expenditure: Examples, Formula
What's it: Induced expenditure is a type of expenditure where the amount varies with income. In macroeconomics, it represents spending by four
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Aggregate Demand Curve: Meaning, Sloping Reasons, Determinants
What's it: An aggregate demand curve is a graph showing the inverse relationship between aggregate demand and the price level. Aggregate
Capacity Utilization: Its Relationship With Profitability, Aggregate Demand and the Economy
What's it: Capacity utilization refers to the extent to which existing production capacity is used. It may refer to a company's machinery or
Business Confidence: Its Effect on Aggregate Demand and the Economy
What's it: Business confidence describes how optimistic or pessimistic businesses are about their current and future operating and financial
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Consumer Confidence: Its Effect on Aggregate Demand and the Economy
What's it: Consumer confidence describes how optimistic and pessimistic consumers are about their daily lives. It is usually associated with
Aggregate Demand: Formula, Components and Determinants
What's it: Aggregate demand (AD) is the sum of demand for goods and services in the economy at a given price level and a certain period. In the open