As prices decrease, consumption could increase and aggregate output also.

In the process, aggregate output may increase as a by-product or by design.

The simple version models aggregate output as a function of the price surprise.

Now suppose that there exists a drop in aggregate output.

As we have shown, correct expectations imply that aggregate output will equal its natural level.

Solow assumed a very basic model of annual aggregate output over a year (t).

They conclude that there is a causal relationship between telecommunications infrastructure investment and aggregate output.

"A meaningful downturn in aggregate output occurred as we moved through October and into November."

The economy will expand in terms of aggregate output, but productivity per worker will remain constant.

The Keynesians of the 1950s and 60s had adopted the view that monetary policy does not impact aggregate output or the business cycle.

As a result a random increase in aggregate demand is likely to produce a positive deviation of aggregate output from its natural level.

Thus aggregate output is equal to its natural rate, β and some positive function of the difference between actual and expected inflation.

Multipliers can be calculated to analyze the effects of fiscal policy, or other exogenous changes in spending, on aggregate output.

In order to model rare disasters, Barro introduces the equation below, which is a stochastic process for aggregate output growth.

So in both cases aggregate output will remain at its natural level in the face of a change in the general level of prices.

Their model has become influential because earlier real business cycle models typically relied on large exogenous shocks to account for fluctuations in aggregate output.

The model developed so far suggests that only random movements in aggregate demand will cause real aggregate output to deviate from its natural or normal level.

So, in this case too, a random increase in aggregate demand will typically produce a 'strung out' response in aggregate output.

First he rewrites equation (6.1) as: where is by definition the deviation of aggregate output in the ith country from its natural rate (that is,).

Also that the multiplier can work in reverse as well, so an initial fall in spending can trigger further falls in aggregate output.

In the Keynesian injection-leakage or circular flow model, leakages are combined with injections to identify equilibrium aggregate output.

The celebrated IS/LM model is one of the models used to depict the effect of interaction on aggregate output and interest rates.

Most early macroeconomic models, including early Keynesian models, were based on hypotheses about relationships between aggregate quantities, such as aggregate output, employment, consumption, and investment.

(3) It requires that challenges to foreign country subsidies be affirmatively supported by domestic producers whose aggregate output is more than 50 percent of the relevant domestic industry.

In case of a positive fiscal shock i.e. increase in fiscal deficits, the aggregate output rises beyond the potential output thus raising the aggregate demand.