This topic contains a solution. Click here to go to the answer

Author Question: Explain the intuition behind why the aggregate demand curve is downward sloping. Why does an ... (Read 27 times)

pane00

  • Hero Member
  • *****
  • Posts: 579
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
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
YES! Correct, THANKS for helping me on my review


bigcheese9

  • Member
  • Posts: 333
Reply 3 on: Yesterday
Gracias!

 

Did you know?

In the ancient and medieval periods, dysentery killed about ? of all babies before they reach 12 months of age. The disease was transferred through contaminated drinking water, because there was no way to adequately dispose of sewage, which contaminated the water.

Did you know?

Over time, chronic hepatitis B virus and hepatitis C virus infections can progress to advanced liver disease, liver failure, and hepatocellular carcinoma. Unlike other forms, more than 80% of hepatitis C infections become chronic and lead to liver disease. When combined with hepatitis B, hepatitis C now accounts for 75% percent of all cases of liver disease around the world. Liver failure caused by hepatitis C is now leading cause of liver transplants in the United States.

Did you know?

It is important to read food labels and choose foods with low cholesterol and saturated trans fat. You should limit saturated fat to no higher than 6% of daily calories.

Did you know?

Tobacco depletes the body of vitamins A, C, and E, which can result in any of the following: dry hair, dry skin, dry eyes, poor growth, night blindness, abscesses, insomnia, fatigue, reproductive system problems, sinusitis, pneumonia, frequent respiratory problems, skin disorders, weight loss, rickets, osteomalacia, nervousness, muscle spasms, leg cramps, extremity numbness, bone malformations, decayed teeth, difficulty in walking, irritability, restlessness, profuse sweating, increased uric acid (gout), joint damage, damaged red blood cells, destruction of nerves, infertility, miscarriage, and many types of cancer.

Did you know?

To combat osteoporosis, changes in lifestyle and diet are recommended. At-risk patients should include 1,200 to 1,500 mg of calcium daily either via dietary means or with supplements.

For a complete list of videos, visit our video library