Distinguish between Aggregate Demand and Aggregate Supply.

1.	Distinguish between Aggregate Demand and Aggregate Supply.
Answer» aggregate demand is the sum of consumption demand, investment demand, government demand for goods and services, plus net exports. Aggregate supply is simply total output gross domestic product the total production of goods and services in the ECONOMY. Both aggregate demand and aggregate supply are depicted as curves, with the price level on the vertical axis and INCOME and output on the horizontal axis. It should be noted that unlike the supply and demand curves for particular goods and services, where the quantity supplied or DEMANDED is a well-defined FUNCTION of the price of the good or service, the connection between the aggregate demand and supply curves and the overall price level is quite a bit more MYSTERIOUS.

Answer»

aggregate demand is the sum of consumption demand, investment demand, government demand for goods and services, plus net exports. Aggregate supply is simply total output gross domestic product the total production of goods and services in the ECONOMY. Both aggregate demand and aggregate supply are depicted as curves, with the price level on the vertical axis and INCOME and output on the horizontal axis.

It should be noted that unlike the supply and demand curves for particular goods and services, where the quantity supplied or DEMANDED is a well-defined FUNCTION of the price of the good or service, the connection between the aggregate demand and supply curves and the overall price level is quite a bit more MYSTERIOUS.

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