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Author Question: The aggregate demand curve portrays the relationship between price level and real GDP. What are the ... (Read 88 times)

viki

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on: Jun 30, 2018
The aggregate demand curve portrays the relationship between price level and real GDP. What are the three reasons this relationship is a negative or inverse relationship? Provide brief illustrations of each.

Question 2

The ratio of U.S. government spending to GDP reached its peak during:
 a. World War I.
  b. World War II.
  c. the Great Depression.
  d. the real estate crisis.
  e. the bursting of the stock market bubble.


eliasc0401

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Reply #1 on: Jun 30, 2018
Answer to Question 1

The three complementary explanations for the negative slope of the aggregate demand curve include are the real wealth effect, the interest rate effect, and the open economy effect. Brief examples accepted at instructor discretion.

Answer to Question 2

b


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