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Zanzabum
3 years ago
5

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.
Advanced Placement (AP)
1 answer:
MA_775_DIABLO [31]3 years ago
7 0

Explanation:

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.

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Answer:

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3 years ago
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Explanation:

1. Employed as she was working before the holidays.

2.No, as people are considered employed if they did any work at all for pay or profit during the survey reference week.

3.Yes, as she won't be getting any pay or profit.

4.No, as to be counted as 'unemployed' you will have to be looking for work, or currently available to work. But, she is working as a substitute.

5.Yes, because she will have to look for a job.

6. I'm not sure about that one sorry

7.Yes, because he won't be getting pay or profit.

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2 years ago
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Answer:

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