Suddenly, aggregate demand increases. As a result real GDP will decrease and prices will remain largely unchanged.
Aggregate demand increases as the components of aggregate demand, including personal consumption, capital spending, government spending, and exports minus imports, increase.
Aggregate demand is a measure of the aggregate demand for all manufactured goods and services produced in the economy. Aggregate demand is expressed as the total amount exchanged for those goods and services at a particular price level and time point.
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