What is the relationship between an aggregate supply and aggregated demand?

Aggregated supply and aggregate demand is the overall supply and total demand in all goods and services in the economy. Most nations have economies composed of individual industries and industries, each of which increases to the overall economy. Consumer demand for goods and services affects how companies will satisfy this demand with products. This creates a symbiotic relationship that allows companies to determine which product will produce the most profitable. The study of supply and demand is known as macroeconomics.

Macroeconomics is a view from bottom to bottom on the economy. Rather than focusing on economic transactions at an individual level, it attempts to discover changes or changes in the economy through government policy and natural market forces. Aggregated supply and demand play an important role in a macroeconomic study. Changes in unemployment, national income level, growth, inflation, price levels and gross domestic product affect both parties of this economic equation.

These two factors are usually represented by curves in the graphics chart. The power curve starts at the bottom left and slopes upwards up to the right top of the graph. Although it is not a simple sum of all individual supplies in economics, the low level of offer will be a flat bid curve. As more companies increase products, the offer curve becomes more vertical when folding into the graph.

The

aggregated demand curve starts at the top left of the graph and tends to downwards towards the lower right graph. This curve is inclined because of the consumption and effect of real wealth. The increase in interest rates by the central bank will lead to lower demand because the purchasing power decreases. The real effect of wealth forces to demand how the price of goods and services increases, creating lower demand.

Aggregated supply and aggregated demand affect the price of the product. Each curve intersects in to determinethe moment on the graph; This represents an equilibrium point for goods and services. At this price point, consumers usually buy the most products. Shifts occur when monetary policy increases or reduces money supply. Free money policy tends to increase supply and demand because there are more money for business investments and consumption, while a close money supply has the opposite effect. In addition, it will have more government regulations or taxes tend to slow down the economy, as these factors increase obstacles to the entry or penalty of individuals and companies for economic activity.