Question

Apply the determinants of aggregate supply and demand to real-world examples

Answer 1

The full employment in the economy determined by the interaction of aggregated demand and supply.The followings are the components of the aggregates supply and demand.

Aggregates supply-The aggregate supply int the economy is fixed in short run example Economic resource like land, labor, capital, organization. The productivity of these factors improved over a period of the time. The technology progress and population growth also fixed in the short run it is only through long-run their productivity increased.

Aggregate demand - the main components of the aggregate deamnd is Consumption function, investment function, net export and government expenditure. The level of employment in the short run depends on these factors.

The ups and downs in the economy depend on aggregate demand example higher the aggregate demand results from int he full employment.