--%>

Employ the aggregate demand-aggregate supply model

Between the year of 1990 and 2005 the Canadian price level rose by approximate 36 percent whereas its real output raised by approximately 52 %. Employ the aggregate demand-aggregate supply model to show these outcomes graphically.

 

 

E

Expert

Verified

In the graph illustrated, both AD & AS expanded over the 1990-2005 period. Since aggregate supply rose as well as aggregate demand, the new equilibrium output rose at faster pace than did the price level. P2 is 36% above P1 and GDP2 is 52% higher than GDP1. 

1507_aggregate demand-aggregate supply model.png

   Related Questions in Finance Basics

  • Q : Define Performance Budget Performance

    Performance Budget: A budget in which proposed expenditures are prepared and tracked mainly by measurable performance objectives for actions or work programs. The performance budget might also incorporate other bases of expenditure categorization, lik

  • Q : What is Cash Flow Statement What is

    What is Cash Flow Statement: It is a statement of cash receipts and disbursements for a particular time period.

  • Q : Explain Object of Expenditure Object of

    Object of Expenditure (Objects): It is a categorization of expenditures based on the kind of goods or services received. For illustration, the budget group of Personal Services comprises the objects of Salaries and Wages and Staff Benefits.

  • Q : Question on hypothetical economy Normal

    Normal 0 false false

  • Q : Define Accrual Basis of Accounting

    Accrual Basis of Accounting: The foundation of accounting in which transactions are identified whenever they take place, regardless of when cash is disbursed or received. The revenue is recorded whenever earned, and expenses are recor

  • Q : Pros and cons of commercial paper

    Describe pros and cons of commercial paper associated to bank loans for a company seeking short-term financing? Usually commercial paper is a cheaper source of short-term financing for a firm, compared to bank loans. Also, a larger amount of fu

  • Q : Four supply factors of economic growth

    Normal 0 false false

  • Q : Determine the level of real output in

    Normal 0 false false

  • Q : Describe who owns a credit union

    Describe who owns a credit union? Credit unions are owned through their members. While credit union members put money in their credit union, they are not "depositing" the money technically.  In spite of, they are purchasing shares of the cr

  • Q : Impact of an increase in the total

    Normal 0 false false