Respuesta :
If aggregate demand decreases and aggregate supply decreases, the level of real output will decrease, but the price level may increase, decrease, or stay the same.
If both aggregate demand and supply decrease, it will affect the GDP and employment rate, as these will drop. The effect of this on price levels will only be known if the magnitude of the changes is known. If the decrement of the aggregate demand exceeds that of the aggregate supply, the price level will drop.
Aggregate demand is the amount of total spending on domestic goods and services in an economy. Whereas, aggregate supply is the total quantity of output which firms will produce and sell, such as GDP.
Hence, the level of real output will increase or decrease when both aggregate demand and supply decreases.
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