What are the substitution effects that affect aggregate demand?
What will be an ideal response?
There are two substitution effects that affect aggregate demand and help account for the negative slope of the AD curve. First, an increase in the price level raises the interest rate, which reduces the quantity of real GDP demanded. Second, an increase in the U.S. price level raises the price of U.S. goods relative to foreign goods which also decreases the quantity of U.S. real GDP demanded.
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The maximum total economic profit that can be made by colluding duopolists
A) is less than the economic profit made by a monopolist. B) equals the economic profit made by a monopolist. C) exceeds the economic profit made by a monopolist. D) bears no necessary relation to the economic profit made by a monopolist.
What are some distinctions between light industry and heavy industry? Why do economies tend to start with light, and move to heavy industries?
What will be an ideal response?