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As the price level rises, the cost of borrowing money will causing the quantity of output demanded to . This phenomenon is known as the effect. Additionally, as the price level rises, the impact on the domestic interest rate will cause the real value of the dollar to in foreign exchange markets. The number of domestic products purchased by foreigners (exports) will therefore and the number of foreign products purchased by domestic consumers and firms (imports) will Net exports will therefore causing the quantity of domestic output demanded to This phenomenon is known as the effect.

As the price level rises, the cost of borrowing money will causing the quantity of output demanded to . This phenomenon is known as the effect. Additionally, as the price level rises, the impact on the domestic interest rate will cause the real value of the dollar to in foreign exchange markets. The number of domestic products purchased by foreigners (exports) will therefore and the number of foreign products purchased by domestic consumers and firms (imports) will Net exports will therefore causing the quantity of domestic output demanded to This phenomenon is known as the effect.

Principles of Economics 2e
Principles of Economics 2e
2nd Edition
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:Steven A. Greenlaw; David Shapiro
Chapter26: The Neoclassical Perspective
Section: Chapter Questions
Problem 21P: Use Table 26.3 to answer the following questions. Sketch an aggregate supply and aggregate demand...
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Hi please answer these fill in blanks according to the graph, thank you.

As the price level rises, the cost of borrowing money will , causing the quantity of output demanded to This phenomenon is known as the effect. Additionally, as the price level rises, the impact on the domestic interest rate will cause the real value of the dollar to in foreign exchange markets. The number of domestic products purchased by foreigners (exports) will therefore and the number of foreign products purchased by domestic consumers and firms (imports) will . Net exports will therefore causing the quantity of domestic output demanded to This phenomenon is known as the effect.
Transcribed Image Text:As the price level rises, the cost of borrowing money will , causing the quantity of output demanded to This phenomenon is known as the effect. Additionally, as the price level rises, the impact on the domestic interest rate will cause the real value of the dollar to in foreign exchange markets. The number of domestic products purchased by foreigners (exports) will therefore and the number of foreign products purchased by domestic consumers and firms (imports) will . Net exports will therefore causing the quantity of domestic output demanded to This phenomenon is known as the effect.
3. Why the aggregate demand curve slopes downward The following graph shows the aggregate demand (AD) curve in a hypothetical economy. At point A, the price level is 120, and the quantity of output demanded is $500 billion. Moving up along the aggregate demand curve from point A to point B, the price level rises to 140, and the quantity of output demanded falls to $300 billion. 170 160 150 B 140 130 A 120 110 AD 100 90 100 200 300 400 500 600 700 800 OUTPUT (Billions of dollars) PRICE LEVEL శ్రీక్రి
Transcribed Image Text:3. Why the aggregate demand curve slopes downward The following graph shows the aggregate demand (AD) curve in a hypothetical economy. At point A, the price level is 120, and the quantity of output demanded is $500 billion. Moving up along the aggregate demand curve from point A to point B, the price level rises to 140, and the quantity of output demanded falls to $300 billion. 170 160 150 B 140 130 A 120 110 AD 100 90 100 200 300 400 500 600 700 800 OUTPUT (Billions of dollars) PRICE LEVEL శ్రీక్రి
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