Aggregate Demand and Supply Models Essay Example for Free

Aggregate Demand and Supply Models EssayAs it stands currently the existing effect of the economic factors on hoard strike and supply are unemployment, consumer income, and interest rates. In this paper we identify the existing effect of the economic factors on aggregate demand and supply. The American good deal go through little to no income when unemployed, this in acidulate causes a decrease in demand for the economy. This type of event causes the aggregate demand to curve to the left. champion of the main reasons unemployment remains high to this day is the lack of demand. A shortfall in aggregate demand is precisely the type of issue that can be addressed by monetary policy, however, to do so we need continuous monetary stimulus to progress toward maximum employment stability. The crash of the housing marketplace has set tremendous limitation on consumer and their spending. Sternness on behalf of the government to a certain extent has decreased aggregate demand durin g this recovery period. These actions have directly impacted growth. What this means to us is that lower government spending and higher taxes call for disposable income for consumers, work for government contractors diminishing, and a decrease in government payroll. A nonher factor that has had great effect and impact are the levels of uncertainty. The events leading to this state have yet to be resolved which in turn have caused a lack of willingness and confidence within consumers. In the beginning the levels of uncertainty reflected the force of influence the recession had on us as consumers. This is something that had not been experienced in several years which made it difficult for us to handle or even find a way to get by in a more successful demeanor. After extensive research and analysis it is safe to say the supply-side considerations explain some of the rise in unemployment, which at one time again confirm the lack of demand as well as the fact that the economy is sufferi ng first and foremost of a weak demand rather than a shortage of supply.ReferencesWilliams, J. C. (2013, February 25). The Economy and Fed Policy Follow the Demand. Federal Reserve Bank of San Francisco. Retrieved from http//www.frbsf.org/economic-research/publications/economic-letter/2013/february/economy-fed-policy-follow-demand/Thoma, M. (2012, March 28). Demand, not supply, is restraining the economy. CBS News. Retrieved from http//www.cbsnews.com/8301-505123_162-57405230/demand-not-supply-is-restraining-the-economy/