Aggregate demand impacts business output from "summary" of Macroeconomics for Business by Lawrence S. Davidson,Andreas Hauskrecht,Jürgen von Hagen
Aggregate demand is a critical concept that businesses need to understand in order to navigate the macroeconomic environment. Put simply, aggregate demand refers to the total amount of goods and services that consumers, businesses, and the government are willing and able to purchase at a given price level. This concept is key because it has a direct impact on business output.
When aggregate demand is high, businesses tend to see an increase in their output levels. This is because there is a greater demand for goods and services, which means that businesses need to produce more in order to meet this demand. In this situation, businesses may need to hire more workers, invest in more equipment, and expand their operations in order to keep up with the demand for their products.
Conversely, when a...
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