Aggregate Demand And Supply

"Aggregate Demand and Supply" Please respond to the following: You have been hired as a consultant by your mayor to evaluate the increase in aggregate demand in the city where you vive. Describe to the mayor one aggregate demand and supply factor that would have the greatest impact on the economy of your city. Explain how a decrease in aggregate demand affects each of the following variables: inflation, unemployment rate, production, employment rate, and consumer confidence. Provide concrete examples to support your response. Answer: Hello Mr. Mayor,Our city is facing a situation where there is an increase in aggregate demand. This increase is explained as Increase in demand of goods and services from households, firms, government and foreign sector. Increase in demand generally increases output and employment and results in slight increase in the price. This situation will continue so far level of full employment has not been reached or situation of involuntary unemployment is in operation. Since in our city the oligopolistic conditions prevail, few firms dominate the market of the industrial sector. Agriculture sector has competitive structure but the policy of price ceilings or price supports are adopted by the government. In this case any increase in excess