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arlik [135]
3 years ago
15

What is the relationship between the price level and the following components of aggregate demand. a. There is relationship betw

een the price level and consumption. b. There is relationship between the price level and investment. c. There is relationship between the price level and government spending. d. There is relationship between the price level and net exports.
Business
1 answer:
mojhsa [17]3 years ago
7 0

Answer:

a. Negative

b. Negative

c. No

d. Negative

Explanation:

a. There is a negative relationship between price level and consumption. As the price level increases, the real money income and purchasing power of consumers decline. This causes their consumption spending to decline as well.  

b. There is a negative relationship between the price level and investment. A decline in the price level implies that the consumers will need a lesser amount of money. This will cause the demand for money to decrease. The leftward shift in the money demand curve will cause the interest rate to fall. At a lower interest rate, the investment will be higher.  

c. There is no direct relationship between the price level and government spending. An increase in government spending will increase aggregate demand. This, in turn, will cause the price level to increase. Though an increase in price level does not essentially cause government spending to increase.  

d. A higher price level will make domestic goods expensive as compared to imports. This will cause the imports of goods to increase and exports to decline. So an increase in price will cause the net exports to fall.

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Marta_Voda [28]

Answer:

a. Current ratio

Explanation:

Current Ratio is the least likely to be affected

The  Current Ratio is given as

Current Ratio = [ Current assets ] ÷ [ Current liabilities  ]

Now,

Building a new plant is a fixed asset for the company.

Thus, It will add to the Fixed assets

Since,

The Formula for current ratio is independent of the fixed assets

Therefore,

It will be least affected.

While,

Debt to equity ratio = [ Debt ] ÷ [ Equity ]

Debt to asset ratio= [ Total Debt ] ÷ [ Total Assets ]

Net fixed assets to total assets = [ Net fixed assets ] ÷ [ Total assets ]

in all the above relations, fixed asset will change the value of the total assets.

Hence,

They all will be affected

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Shalnov [3]
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Harrison and Sherrie are making decisions on their bank accounts. Harrison wants to put more money in as a principle amount beca
Troyanec [42]
Sherrie wants to put the original money in an account with a higher interest rate. Explain which method will result in more money.

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I hope it helps, Regards.
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Answer:$2:09

Explanation:  If you subtract the 2 you will get your answer! :)

(Sorry I just read the question wrong)

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Angelina_Jolie [31]

Answer:

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Explanation:

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