According to the wealth effect aggregate demand slopes downward (negatively) because ?

Related Mcqs:

Which of the following statements about economic fluctuations is true ?

A. None of these answers B. A depression is a mild recession C. A variety of spending income, and output measures can be used to measure economic fluctuation because most macroeconomic quantitties tend to fluctuate together D. A recession is when output rises above the natural rate of output...

Which of the following would not cause a shift in the long-run aggregate supply curve ?

A. All of these answers shift the long-run aggregate supply curve B. An increase in the available capital C. An increase in the available labour D. An increase in price expectations...

Suppose the price level falls but because of fixed nominal wage contracts the real wage rises and firms cut back on production This is a demonstration of the ?

A. sticky-wage theory of the short-run aggregate supply curve B. classical dichotomy theory of the short-run aggregate supply curve C. misperceptions theory of the short-run aggregate supply curve D. sticky-price theory of the short run aggregate supply curve...

Suppose the economy is initially in long-run equilibrium Then suppose there is an increase in military spending due to rising international tensions According to the model of aggregate demand and aggregate supply what happens to prices and output in the short run ?

A. Price fall; output rises B. Price fall; output falls C. Price rise; output fall D. Price rise; output rise...

Stagflation occurs when the economy experiences ?

A. rising prices and rising output B. rising prices and falling output C. falling prices and falling output D. falling prices and rising output...