How does an increase in aggregate demand, influenced by positive economic indicators, affect the equilibrium price and overall price level in an economy?

When aggregate demand increases due to positive economic indicators, it means that people and businesses are willing to spend more money on goods and services. This higher demand puts pressure on prices because suppliers may not be able to keep up with the sudden increase in orders. As a result, businesses might raise their prices to balance the higher demand with their production capacity, leading to an increase in the overall price level in the economy. For example, if a new technology is released and everyone wants to buy it, the company may increase the price because of the high demand. This change in price reflects a new equilibrium, where supply meets the increased demand at a higher price point.