What two variables are determined in an aggregate ...

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What two variables are determined in an aggregate supply-aggregate demand figure? Is the slope of the short-run aggregate supply curve positive or negative? Is the slope of the aggregate demand curve positive or negative?
 
  What will be an ideal response?

Question 2

Between 2000 and 2015, the price of a PC fell and the quantity of PCs sold increased. Which of the explanations below is consistent with these facts?
 
  A) The demand for PCs increased by more then the supply of PCs increased.
  B) The supply of PCs increased by more than the demand for PCs increased.
  C) The demand for PCs decreased by more than the supply of PCs increased.
  D) Both the supply of PCs and the demand for PCs decreased.

[Viet Thy]

Answer to Question 1

The aggregate supply-aggregate demand framework determines the equilibrium price level and equilibrium real GDP. The aggregate supply curve is positively sloped, indicating that an increase in the price level increases the aggregate quantity of goods and services supplied. The aggregate demand curve is negatively sloped, indicating that an increase in the price level decreases the aggregate quantity of goods and services demanded.

Answer to Question 2

B

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[Viet Thy]

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