What happens to the AD curve when the value of household assets increases?
What will be an ideal response?
Answer: Spending increases and this shifts AD to the right.
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If the price of nacho chips increases from $2.00 per bag to $3.00 per bag and the quantity demanded goes down from 100 million bags per week to 50 million bags per week, the absolute value of price elasticity of demand in that price range is
A) 0.50. B) 1.67. C) 0.93. D) 2.33.
Which of the following is correct?
A) AFC = TC/Q - TVC/Q B) AVC = TVC - AFC C) TC = AVC?Q D) MC = TC - TVC
Refer to Figure 13-4. What is the area that represents the loss made by the firm?
A) the area P1bcP2 B) the area P0acP2 C) the area P2cdP3 D) the area P0adP3
Which of the following would cause a change in the quantity demanded of a product?
A) a higher price B) a higher income C) expectations of future price increases D) All of the above are correct.