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Q. Explain how a rise in real income affects aggregate demand.
Answer: An increase in domestic real income Y leads to a rise in disposable income Yd. This increases the spending on imports IM therefore lowering the current account CA and reducing aggregate demand AD. Though, the rise in Yd as well causes a rise in consumption C and increases aggregate demand AD by more than the corresponding diminish.
The Republic of Ireland has had colossal economic problems for many years. On the other hand, in the last two decade, the nation has experienced a thriving economy and has becom
Q. Why is the H.O. model called the factor-proportion theory? Answer: The H.O. model survey the limitations and the nature of presumptuous that the sole determinant of compar
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Q. In 1986, the price of oil on world markets dropped sharply. Since the United States is an oil-importing country, this was widely regarded as good for the U.S. economy. Yet in
How can I present the theories step by step in an assignment?
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