Purchase Solution

Unemployment can be caused by a decrease of aggregate demand

Not what you're looking for?

Ask Custom Question

Explain: "Unemployment can be caused by a decrease of aggregate demand or a decrease of aggregate supply". In each case, specify the price-level outcomes.
(include a example relating concepts in questions to every - day event)

Purchase this Solution

Solution Summary

Solution clearly explains how decrease of aggregate demand causes Unemployment

Solution Preview

When either Aggregate Demand (AD) or Aggregate Supply (AS) decreases, output (Y) decreases as a result.

When output decreases, less is being produced so the firms don't hire as many workers (or may cut jobs) since they are not needed, which causes unemployment to rise.

More specifically. though, there ...

Purchase this Solution

Free BrainMass Quizzes
Pricing Strategies

Discussion about various pricing techniques of profit-seeking firms.

Elementary Microeconomics

This quiz reviews the basic concept of supply and demand analysis.

Basics of Economics

Quiz will help you to review some basics of microeconomics and macroeconomics which are often not understood.

Economic Issues and Concepts

This quiz provides a review of the basic microeconomic concepts. Students can test their understanding of major economic issues.

Economics, Basic Concepts, Demand-Supply-Equilibrium

The quiz tests the basic concepts of demand, supply, and equilibrium in a free market.