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Shifts in the AD and AS curves and Equilibriums
The impact of shifts of AD curve are:
An increase in AD raises realGDP, lowers the unemployment rate, and increases the aggregate level of prices.
A decrease in AD lowers real GDP, increases the unemployment rate, and decreases the aggregate level of prices.
The impact of shifts of AS curve are:
An increase in AS raises real GDP, lowers the unemployment rate, and lowers the aggregate level of prices.
A decrease in AS lowers real GDP, raises the unemployment rate, and raises the aggregate level of prices.
Demand-driven expansions are normally associated with rising interest rates and inflation, whereas contractions are associated with lower inflation and interest rates.
Supply-driven expansions are associated with lower inflation and interest rates, whereas contractions are associated with rising inflation and interest rates.
177Short- and Long-Run Cost Curves:Short-“and Long-Run Cost Curves”cost SATC curve and a corresponding long-runaverage total cost LRAC curve.
254Shifts in the AD and AS curves and Equilibriums:A decrease in AD lowers real GDP:contractions are associated with rising inflation and interest rates.
73Shifts in Aggregate Demand and Supply:economy associated with the business cycle.
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