short run growth logic chainshort run growth
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short run growth (definition)
an increase in aggregate demand can lead to short run growth because AD influences the level of economic activity
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logic chain pt 1
an increase in AD causes an increase in total expenditure which means there is more demand for goods and services
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logic chain pt 2
this increase in demand leads firms to increase their output to meet higher demand
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pt3
the increase in the firm’s output is shown by a movement along the SRAS curve, resulting in a rise in real national income
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