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Which of the following is a reason why the aggregate demand curve slopes downward? a. At a higher price level, fewer goods and services are available. b. Periods when the price level is rising are usually time of shift declined in economic activity. c. Households feel poorer with an increase in average prices. d. If the U.S. price level rises, foreigners will buy more U.S. goods, leaving fewer U.S. goods for domestic consumer's e. As the price level rises, business leaders become pessimistic about the future and reduce production.
What are forms of price floors to lead inefficiency? Price floors frequently lead to ineffectiveness in the forms of: a. Inefficient allocation of sales in between sellers
The aggregate demand curve shows the combinations of the price level and the level of output at which the goods and money markets are simultaneously in equilibrium. Let us now go o
Market questions come in two types: Type 1: you are given the exogenous variable change and you must shift the correct curve in the right direction and then determine the new pr
What is Monetary base The monetary base is defined as the total value of all currency (banknotes and coins) outside the central bank and commercial banks' (net) reserves with t
You operate your own small building company and have decided to bid on a government contract to build a pedestrian walkway in a national park during the coming winter. The walkway
Derive the conditions for steady state in the Solow model. What are its implications? In what respects is the golden rule different from the steady state?
Q. Show the Changes in the exchange rate? Assume that United States is our home country and the current euro exchange rate in direct notation is SD = 1.5 (euro/USD). In indirec
Financing of Fiscal Deficit: Since the size of balanced budget of the multiplier is small, it is not for all time possible to get the needed demand expansion by raising the exp
The Phillips curve in Lowland takes the form of ? = 0.04 - 0.5 (u - 0.05), where ? is the actual inflation rate and u is the unemployment rate. The Phillips curve in Highland takes
Functions of a Commercial Bank 1. Credit Creation Creation of credit is a major function of a commercial bank. When a bank creates credit or advances loans, there tends
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