Analyzing Production Responses in a Demand-Driven Model

In an economic framework where it is assumed that businesses have spare capacity and are willing to produce any quantity of goods and services that is demanded at the current price level, what is the primary determinant of the economy's total output?

Evaluating a Core Supply-Side Assumption

In an economic model where it is assumed that businesses are always willing and able to produce more goods at existing prices, a significant, unexpected increase in aggregate demand will primarily cause a rise in the overall price level.

Firm Behavior in a Demand-Driven Economy