Question

Assuming an upward-sloping supply curve, when aggregate demand increases then: ____________________, and ________________. What happens to macro equilibrium?

Answer 1

Assuming an upward sloping supply curve ,when aggregate demand increases then unemployment decreases and price level increases.

The output level at which the aggregate demand curve exceeds the aggregate supply is always equal the level at which Macro Equilibrium is achieved.At macro equilibrium spending is equal to total output.

when economy is at equilibrium leakages equal injections.that is the total amount of funds leaving the circular flow returns if the economy is in equilibrium.

note : (linkages is a diversion of income from spending on output)