The wealth effect, interest-rate effect, and exchange-rate effect all help explain why the aggregate demand curve is downward sl
oping. Phyllis, a fellow student in your AP Macro class, suggests that the substitution effect that you learned about in Unit 1 also explains why aggregate demand curve is downward sloping. She reasons that since it explains why a market demand curve is downward sloping, it must also be valid for aggregate demand. Explain why Phyllis is wrong.
The aggregate demand curve is downward sloping. It implies price levels are falling and the quantity of output will increase as well as the domestic income. The theories that can explain why the aggregate demand curve is downward sloping: the Pigou's wealth effect, the Keynes's interest-rate effect, and the and Mundell-Fleming's exchange-rate effect.
the principal method of human communication, consisting of words used in a structured and conventional way and conveyed by speech, writing, or gesture
Language Language acts as a specific centripetal force because it unites people through a common form of communication. English in the U.S, Hindi in India, Bengali in Bangladesh, and Punjabi in Pakistan, eliminate miscommunication.
Language can serve as a prime example as a centrifugal force. For example, in Canada, the French speaking people are concentrated in Quebec and want to preserve their language. Quebec has thought about breaking away from Canada and becoming Independent to preserve their language and culture.
They are called Romance languages because their parent tongue, Latin, was the language of the Romans
Languages are seen as an important part of our culture by many people. Language shift can be described as a diffusion process in accordance with physical diffusion—as spread of the dominant language and resulting retreat of the minority language.
a language that is adopted as a common language between speakers whose native languages are different.
In fact, there are two factors that might block the diffusion, or spread, of a cultural trait from one culture to another: physical characteristics and human characteristics. The map on the left shows the origination of four world religions and how those religions spread over time.
