Answer:
What happens to the wealth effect of a change in the aggregate price level as a result of this allocation of assets?
- The consumers' wealth effect will rise since the slope of the aggregate demand curve increases as the prices of assets increases, i.e. the slope of the aggregate demand curve becomes steeper as customers become wealthier.
Will aggregate demand still be downward sloping? Why or why not?
- The aggregate demand curve sill still be downward sloping because as the price of a good or service increases, the quantity demanded will still decrease. An inverse relationship exists between price changes and quantity demanded.
Answer:
If a price is too high to clear the market, that means the quantity of supplies have exceeded the amount that is demanded.
Explanation:
Have a great summer :)
Answer: B. The capital gains yield is positive.
Explanation:
The Capital Gains Yield is a percentage figure that tells how much an investment has increased in price from it's acquisition.
It works by taking the new value and dividing it by the original value.
Using Stacy as an example, the Stock increased by $4 so assuming she bought the stock for even $0.1 then her Capital Yield is,
= 4/0.1
= 40 * 100%
= 4000% which is positive
As long as the stock was sold for more than it was bought, Capital Yield Gain is positive.
