The interest-rate and wealth effects are important because they help explain:
A) rightward and leftward shifts of the aggregate demand curve.
B) the movement across a given AS curve
C) the movement across a given AD curve.
D) the shape of the AS curve.
Correct Answer:
Verified
Q6: An AD curve is:
A) vertical if full
Q7: The wealth effect indicates that:
A) an increase
Q8: The substitution (trade-effect) shows that:
A) an increase
Q9: A fall in the Canadian price level
Q10: Other things being equal, the higher the
Q12: The substitution effect suggests that an increase
Q13: The wealth effect suggests that a:
A) lower
Q14: The substitution effect suggests that a decrease
Q15: A fall in the Canadian price level
Q16: A rise in the Canadian price level
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