How does Aggregate demand react to a positive supply shock?

Given the economy is at its potential level of output.

2006-11-06 02:00:38 · 2 answers · asked by newbie 1 in Social Science ➔ Economics

It rises. The positive supply shock, pretty much by definition, increases the potential level of output.

2006-11-07 05:20:50 · answer #1 · answered by MBK 7 · 0⤊ 0⤋

It expands.

2006-11-06 04:26:20 · answer #2 · answered by NC 7 · 0⤊ 0⤋

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