Find two newspaper articles, one about an increase or decrease in Aggregate Dema

Question

Find two newspaper articles, one about an increase or decrease in Aggregate Demand AND one about an increase or decrease in Aggregate Supply (remember, it has to be something that includes the entire economy, not just one company or industry). Explain what the article is about (one at a time) and why it is an example of AD or AS shifting. In your analysis of each shift, explain why this article is an example of the shift and explain what would be happening in the graph in detail, including changes in equilibrium price level and Real GDP.

Explanation / Answer

We know very well about GDP(Gross Domestic Product), the value of GDP is determining the countries economical position whether it is going in Developed OR Developing OR in an Underdeveloped situation. Also, the value of GDP will be the key factor in international level to bring the FDI(Foreign Direct Investment) to the respective country.

So, this is all able to see in externally is GDP. However, the real working kings behind the GDP or internal working factors are Demand & Supply of the goods. If the demand & supply is good for consumer goods then the consumption will increase regularly and ultimately the impact will be showing on countries GDP.

So many important factors need to consider to get the good GDP. Suppose, the employment is well maintaining in the country then obviously the consumption value will increase ultimately the GDP value will be shaped into a good figure.

The consumption is the main important thing to determine the countries economic position by the way of GDP. So, the important thing here to discuss Aggregate Demand and Aggregate Supply.

Let us discuss about Aggregate Demand and Aggregate Supply.

Aggregate Demand:

“Demand” it is also one of the important character well played in the business/trade/countries economical position. If the goods have the best good will then automatically supply will be improved later consumption reaches greater heights and finally, it impacts showing on GDP value.

Suppose the supply is working effectively but the demand is not going well for the product then the equilibrium price will change with negative impact ultimately the country GDP value will decrease.

Aggregate Supply:

The supply will need to run simultaneously with demand then only the consumption will increase. Suppose the demand has a product is good but supply will not do work effectively ultimately the equilibrium price may change with negative impact and ultimately the GDP value will decrease. So, when the demand has worked effectively at that moment supply also work equally with demand and raise the production level in order to fulfill the consumption levels.

We have discussed above things like Aggregate Demand and Aggregate Supply. Here, if the demand increases then simultaneously supply should increase the production level OR else the equilibrium price level will change and negative impact will show on Real GDP.

Let us discuss with two examples based on Demand and Supply-

If the demand is more for the product like fairness cream but the supply is very less they are producing only 200 pieces per year. But the demand for the product like 500 pieces per year. Here, the demand is more but supply will not work effectively ultimately equilibrium price level may change drastically.

One more example -

If the supply is more for the product like fairness cream but the demand is very less only sold 200 pieces per year. But the supply for the product is producing 500 pieces per year. Here, the supply is more but demand levels of sold for the product is very low. Supply of quantity is more but the external impact of the sale of a product is very less. Ultimately the equilibrium price levels change drastically and finally, GDP will get record the low value.

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