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What happens when price level and income are not constant in demand?
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Is utility constant along a demand curve?
utility is not constant along the demand curve
'What are the factors affecting demand for land?
technology level of income
If aggregate demand rises what happens to real GDP what happens to the price level?
Inflation.
What is the price level assumed to be in the simple Keynesian model of determination of income?
exogenous and constant
What determines a demand for a product?
Purchase power,income level,necessarity,willingness
Is utility constant along a demand curve?
utility is not constant along the demand curve
'What are the factors affecting demand for land?
technology level of income
If aggregate demand rises what happens to real GDP what happens to the price level?
Inflation.
What is the price level assumed to be in the simple Keynesian model of determination of income?
exogenous and constant
Do you agree with Linders theory that demand patterns which postulate that the level of income in each country determines the type of goods the population will demand?
yes
What determines a demand for a product?
Purchase power,income level,necessarity,willingness
Explain what determine the optimum level of consumption for a consumer?
what determines the optimum consumption of an consumer is their income and their demand for goods and services.
What is Simple theory of Income Determination?
Total income depends on total employment which depends on effective demand which in turn depends on consumption expenditure and investment expenditure. Consumption depends on income and propensity to consume. Investment depends upon the marginal efficiency of capital and the rate of interest. J. M. Keynes made it clear that the level of employment depends on aggregate demand and aggregate supply. The equilibrium level of income or output depends on the relationship between the aggregate demand curve and aggregate supply curve. As Keynes was interested in the immediate problems of the short run, he ignored the aggregate supply function and focused on aggregate demand. And he attributed unemployment to deficiency in aggregate demand.
What happens when you have a surplus of goods to price?
What happens is there is too much of a good and not enough demand. This is called over supply and usually occurs when the current price level for the good is too high. To sell off the remaining goods, the solutions is to lower the price level and increase demand.
What happens going from left to right on the aggregate demand curve real GDP?
rises as price level falls
What factors will shift the supply and demand for currency?
Confidence in the economy. If the economy of the country is doing good, it is likely that the confidence in that currency is high, raising the demand. However, when the economy is sloppy, the lack of confidence brings down the demand level. Level of exports and imports Relative income changes (Higher income in other countries => go on holidays and thus rising demand for other currencies.) Relative interest rate (High interest rate => high return => people invest more in it)
What does income level mean?
what does income level mean?
