Mechanism of formation of the interaction of aggregate demand and aggregate supply
Journal Title: Центральноукраїнський науковий вісник. Економічні науки. - Year 2014, Vol 25, Issue
Abstract
The article investigates the modern mechanism of interaction of aggregate demand and aggregate supply. This is the factor of improvement of theoretical calculations in macroeconomics. There is arguec that the aggregate demand is not always equal to the aggregate supply in this scientific work. Their interaction in any reporting period can lead to the following situations: QS=QD; QS <QD; QS >QD. That is, economic theorys, based on the balance of aggregate demand and supply, make sensc on conditions of equality of produced and consumed gross national product. But this is only a special case. In economy quite often, the real output of does not equal to consumption. If production exceeds consumption, the growth of savings in the economy in the amount of the non consumed goods and services in the economy during the analyzed period. If the real output less than consumption, there is a reduction of savings in the economy to the amount of consumed goods and services produced in the previous reporting period. The results of research show that the interaction of aggregate supply and aggregate demand in the economy we have three variants of the results: QS =QD; QS <QD; QS >QD. Research data assert that the balance of aggregate demand and aggregate supply is a separate case and in real life, they can be inbalance. The factor of the imbalance is to keep during the accumulate, or cost sare affecting on aggregate demand, creating the imbalance in macroeconomics. The balance in the reporting period is possible only if the condition if the change of savings is zero (ΔS=0).
Authors and Affiliations
Serhiy Horlov
Keywords
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