The dynamic aggregate demand and aggregate supply model illustrates that during most years, aggregate demand and long-run aggregate supply increase.

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Quizplus · Accepted Answer

This is because over time there tends to be population growth, technological advances, and changes in consumer preferences, all of which contribute to a growth in aggregate demand. Additionally, businesses tend to expand and invest more in long-run aggregate supply over time, leading to an increase in the potential output of the economy.

The Dynamic Aggregate Demand and Aggregate Supply Model Illustrates That