The aggregate demand curve is a downward sloping curve, indicating that when the price level increases, the total spending of an economy decreases. Consumption levels fall because people spend ...
Meanwhile, supply shocks have a muted effect. At sufficiently low unemployment, there is a labor shortage, so that the economy is at full capacity. Then, higher demand is inflationary, and supply ...
This fundamental economic principle is worth a quick ... The slope of the supply and demand lines (curves) show the amount of a good that will be supplied and demanded at a certain price.