EBK ECONOMICS OF MONEY, BANKING AND FIN
EBK ECONOMICS OF MONEY, BANKING AND FIN
5th Edition
ISBN: 8220106799727
Author: Mishkin
Publisher: PEARSON
Question
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Chapter 23, Problem 7Q
To determine

“If prices and wages are perfectly flexible, then y = 0 and changes in aggregate demand have a smaller effect on output.” Is this statement true, false, or uncertain?

Concept Introduction:

Aggregate demand curve - It represents the aggregate or the total goods and services demanded at different price level in a given period of time. This concept considers an economy as a whole. The equation for AD is AD = C+I+G+NX

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