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In macroeconomics. denotes the relationship between the total quantity of goods and services and the price level for output.
(A) macroeconomic equilibrium
(B) aggegate supply (AS)
© aggregate dernand (AD)
(D) potential GOP
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Ask by Mckenzie Stanley. in the United States
Mar 30,2025

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The answer is © aggregate demand (AD).

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Did you know that the relationship between total goods and services and the price level has been a focal point in economic theory since the Great Depression? Economists like John Maynard Keynes revolutionized our understanding of how demand impacts the economy, showing how shifts in consumer confidence can lead to drastic changes in output and prices. This framework laid the groundwork for many policies we see today!
In the real world, understanding this relationship helps policymakers manage economic fluctuations. For example, during a recession, when demand is low, governments may implement stimulus packages to boost aggregate demand. At the same time, understanding aggregate supply can guide decisions about production levels to prevent inflation when the economy heats up. It’s a balancing act that keeps the economy in check!

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