This topic contains a solution. Click here to go to the answer
« previous next »

Author Question: Explain the intuition behind why the aggregate demand curve is downward sloping. Why does an ... (Read 26 times)

pane00

  • Hero Member
  • *****
  • Posts: 579
on: Jun 30, 2018
Explain the intuition behind why the aggregate demand curve is downward sloping. Why does an increase in the money supply shift the aggregate demand curve to the right?
 
  What will be an ideal response?

Question 2

Within the IS-LM curve model, an increase in government spending financed by printing money will always
 
  a. have no impact on income.
  b. lower income and raise the interest rate.
  c. increase the interest rate.
  d. lower the interest rate and increase income.
  e. increase income.


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

Dominic

  • Sr. Member
  • ****
  • Posts: 328
Reply #1 on: Jun 30, 2018
Answer to Question 1

According to the quantity theory, holding the velocity and supply for money constant, a lower price level means that the same level of money can conduct more transactions, so the level of transactions increases. An increase in the money supply means that a higher level of transactions can be supported for every value of the price level.

Answer to Question 2

E


pane00

  • Member
  • Posts: 579
Reply 2 on: Jun 30, 2018
Great answer, keep it coming :)

bigcheese9

  • Member
  • Posts: 333
Reply 3 on: Yesterday
Excellent

« previous next »
 

Did you know?

Cyanide works by making the human body unable to use oxygen.

Did you know?

More than 30% of American adults, and about 12% of children utilize health care approaches that were developed outside of conventional medicine.

Did you know?

Prostaglandins were first isolated from human semen in Sweden in the 1930s. They were so named because the researcher thought that they came from the prostate gland. In fact, prostaglandins exist and are synthesized in almost every cell of the body.

Did you know?

People with alcoholism are at a much greater risk of malnutrition than are other people and usually exhibit low levels of most vitamins (especially folic acid). This is because alcohol often takes the place of 50% of their daily intake of calories, with little nutritional value contained in it.

Did you know?

Recent studies have shown that the number of medication errors increases in relation to the number of orders that are verified per pharmacist, per work shift.

Distribution of Aggregate Mining Distribution of Aggregate Mining
Mechanisms to Explain the Effects of Massage Mechanisms to Explain the Effects of Massage
Titration curve for the tetrapeptide Glu-Gly-Ala-Lys Titration curve for the tetrapeptide Glu-Gly-Ala-Lys
An Environmental Kuznets Curve An Environmental Kuznets Curve
The Radioactive Decay Curve The Radioactive Decay Curve
Aggregate Fruits: Blackberry Aggregate Fruits: Blackberry
Video: Definition of heart rate

For a complete list of videos, visit our video library