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What term defines a time when there is an increase in money and a decrease in goods?
inflation
How does a decrease in the price level impact real wealth and aggregate demand?
A decrease in the price level can increase real wealth because people's money can buy more goods and services. This can lead to an increase in aggregate demand as consumers are more willing to spend money, which can stimulate economic growth.
Increase in money and decrease in goods?
A common cause for this is unemployment, or when an institution isn't functioning to its fullest potential due to lack of labor (labor being classified as a resource.)
If economy enters in boom period is demand for money increase or decrease?
increase
What happens to money demand when there is an increase in interest rates?
money demand will decrease
What term defines a time when there is an increase in money and a decrease in goods?
inflation
Is a time when there is a increase in money and a decrease in goods?
inflation
What is the term for an increase in money or a decrease in goods?
When the amount of money increases at a faster rate than the production of goods, the result is inflation, an increase in prices as "more money pursues the same goods".
How does a decrease in the price level impact real wealth and aggregate demand?
A decrease in the price level can increase real wealth because people's money can buy more goods and services. This can lead to an increase in aggregate demand as consumers are more willing to spend money, which can stimulate economic growth.
Q: What is inflation?
Inflation is the rate of increase in prices over a given period of time.
Increase in money and decrease in goods?
A common cause for this is unemployment, or when an institution isn't functioning to its fullest potential due to lack of labor (labor being classified as a resource.)
If economy enters in boom period is demand for money increase or decrease?
increase
What happens to money demand when there is an increase in interest rates?
money demand will decrease
What happens when there is an increase in the price of goods and a decrease in the value of money?
Basically a huge financial debt... or you'll have to resort to using gold, silver, or other valuable precious metals
What is a fiscal policy designed to do?
Increase or decrease the money supply
An increase in the money supply is likely to decrease?
the prime rate
How does prosperity increase demand?
The more surplus money people have, the more money they have to buy goods - not just the staple goods, but more luxurious goods.
