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Unformatted text preview: Produce more as prices rise
– Switch to more expensive products What of demand & supply for everything? Drawing AD/AS
Drawing AD/AS Look like D & S
But axes differ subtly
– P = GDP deflator
– y = Real GDP P AD AS y What Is Aggregate Demand?
What A relationship between price and quantity – Of all goods and services
– Demand by all sectors of economy Households, Firms, Government, International C, I, G, (XM) How does aggregate quantity change with price? How do C, I, G, and NX change with price? Why Does AD Slope Down?
Why Does AD Slope Down? Households: wealth...
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- Spring '12