Why does the aggregate demand (AD) curve slope downward? What could cause the AD curve to shift to the right? What impact would a rightward shift of the AD curve have on the economy?
The AD curve slopes downward because of the real balances (wealth) effect, the interest-rate effect and the net exports effect. Anything that increases total spending in the national economy would shift the aggregate demand curve to the right and increase real GDP and the price level (creating demand-pull inflation).
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An example of a clean alternative fuel is
a. hydrogen d. biodiesel b. methanol e. all of the above c. E(85) ethanol
Along a downward-sloping money demand schedule, as the interest rate falls
A) the quantity of money demanded falls. B) the quantity of money demanded rises. C) real income rises. D) real income falls.
Use the above figure. When the price increases from $2 to $10, the absolute price elasticity of demand is
A) 0.67. B) 1.50. C) 0.25. D) 1.00.
Which of the following equations accurately shows a total revenue decrease when demand is price elastic?
a.
b.
c.
d.
