MGEA06H3 Chapter Notes - Chapter 12: Price Level, Aggregate Demand, Aggregate Supply

• School: UTSC
• Department: Economics for Management Studies
• Course: MGEA06H3
• Professor: Iris Au

Document Summary

Macroeconomics notes: lecture six (chapter twelve) part one and two: This shows the relationship between the aggregate price level and the quantity o aggregate output demanded by household"s business the government and the rest of the world. Holding everything constant, there"s an inverse relationship between the aggregate price level (p) and the quantity of aggregate output demanded. Gdp = y = c + i + g + x im. The demand curve for individual goods shows how the quantity demanded depends on the price of that good. The quantity demand falls when the price of that good rises. In macroeconomics, we look at the demand for all goods and services. If all prices, including prices of labour & capital, increase, then dollar incomes also increase. If both incomes and prices increase at the same rate, there is no change in real income = There should be no change in aggregate demand.