In the AS/AD model, as the price level falls, the holders of money become richer and buy more. This is one reason why the aggregate demand curve is downward sloping.
Answer the following statement true (T) or false (F)
True
This is called the money wealth effect.
You might also like to view...
If wheat farmers would receive a larger gross income from wheat sales when half the total wheat crop was destroyed, the demand for their wheat is
A) elastic. B) inelastic. C) larger at higher prices. D) smaller at higher prices. E) unit elastic.
When no one owns a particular resource
A) property rights are clearly defined. B) individuals have legal recourse for any damages caused to their resource. C) no one has any incentive to consider externality spillovers associated with that resource. D) positive externalities will arise.
Economic profit is
A) total revenue × (explicit costs - implicit costs). B) total revenue - (explicit costs - implicit costs). C) total revenue + (explicit costs + implicit costs). D) total revenue - (explicit costs + implicit costs).
The openness of a? nation's economy to international ________ seems to correlate with its rate of economic growth.
Fill in the blank(s) with the appropriate word(s).