week 2 diss
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Discuss the reasons why the aggregate demand (AD) curve slopes downward. After reading chapter 6 and according to Amacher & Pate, (2019) "A negative slope of the AD curve implies that higher prices have a negative effect on planned purchases of real output." The vertical axis is the representation of the level of price measured by GDP and horizontal covers the number of goods and services purchased. Three specific reasons why it slopes downward is wealth effect, trade effect, and interest effect. What causes the AD curve and aggregate supply (AS) curve to shift, respectively? A higher level of cost reduces demand. A shift can take place due to consumption. If we are talking about an upward shift, the AD will move to the right causing the GDP to increase. So this really depends on how...