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Consider the following statements of the effect of an increase in Aggregate Demand: Statement 1: An increase in Aggregate Demand means that people are buying

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Consider the following statements of the effect of an increase in Aggregate Demand: Statement 1: "An increase in Aggregate Demand means that people are buying up more stuff, so an increase in Aggregate Demand means that Aggregate Supply will decrease." Statement 2. "An increase in Aggregate Demand will cause producers to produce more to keep up with demand so that an increase in Aggregate Demand will cause Aggregate Supply to increase.\" Which of these two statements is correct? Are they both correct? Are they both incorrect? Explain why

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