Business, 25.12.2019 21:31 isbella29

Why the aggregate demand curve slopes downward?

the following graph shows the aggregate demand (ad) curve in a hypothetical economy. at point a, the price level is 140, and the quantity of output demanded is $300 billion. moving down along the aggregate demand curve from point a to point b, the price level falls to 120, and the quantity of output demanded rises to $500 billion.

as the price level falls, the cost of borrowing money will (rise, fall, remain the same) , causing the quantity of output demanded to (rise, fall, remain the same) . this phenomenon is known as the (exchange rate, interest rate , wealth) effect.

additionally, as the price level falls, the impact on the domestic interest rate will cause the real value of the dollar to (rise, fall) in foreign exchange markets. the number of domestic products purchased by foreigners (exports) will therefore (rise, fall, remain the same) , and the number of foreign products purchased by domestic consumers and firms (imports) will (rise, fall, remain the same) . net exports will therefore (rise, fall, remain the same) , causing the quantity of domestic output demanded to (rise, fall, remain the same) . this phenomenon is known as the (exchange rate, interest rate , wealth) effect.

Answers: 2

Show answers

Another question on Business

Business, 22.06.2019 20:00

Ryngard corp's sales last year were $38,000, and its total assets were $16,000. what was its total assets turnover ratio (tato)? a. 2.04b. 2.14c. 2.26d. 2.38e. 2.49

Answers: 1

Answer

Business, 23.06.2019 00:10

Warren company plans to depreciate a new building using the double declining-balance depreciation method. the building cost $870,000. the estimated residual value of the building is $57,000 and it has an expected useful life of 20 years. assuming the first year's depreciation expense was recorded properly, what would be the amount of depreciation expense for the second year?

Answers: 2

Answer

Business, 23.06.2019 02:10

Make or buy eastside company incurs a total cost of $120,000 in producing 10,000 units of a component needed in the assembly of its major product. the component can be purchased from an outside supplier for $11 per unit. a related cost study indicates that the total cost of the component includes fixed costs equal to 50% of the variable costs involved. a. should eastside buy the component if it cannot otherwise use the released capacity? present your answer in the form of differential analysis. use negative sign represent a net disadvantage answer; otherwise do not use negative signs with your answers. cost from outside supplier $answer variable costs avoided by purchasing answer net advantage (disadvantage) to purchase alternative $answer b. what would be your answer to requirement (a) if the released capacity could be used in a project that would generate $50,000 of contribution margin? use negative sign represent a net disadvantage answer; otherwise do not use negative signs with your answers.

Answers: 2

Answer

Business, 23.06.2019 02:30

Robert just found out that he is going to be unemployed within a month because his factory has invested in a robotic factory line and his skills are no longer needed. this means that robert is . the gdp within country d has begun to decline. as a result of decreased production, thomas lost his job designing cars. this means that thomas is . raquel has just been offered a job, but she has decided not to take it because she feels her skills merit better pay and a better position. this means that raquel is .

Answers: 1

Answer

You know the right answer?

Why the aggregate demand curve slopes downward?

the following graph shows the aggregate...

Questions