Aggregate Demand - Why AD Curve Slope Downwards - Movement Along the AD Curve
3 important questions on Aggregate Demand - Why AD Curve Slope Downwards - Movement Along the AD Curve
What happens when the inflation rate changes, and nothing else does?
The economy moves to a different point on the same AD curve.
What is the result of higher inflation?
Higher inflation leads to less spending and lower output.
What happens with lower inflation?
Lower inflation encourages more spending and higher output.
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