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Why does an increase in the price level lead to the real-balances effect?
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If a price increase has little or no effect the demand for the product is?
When a price increase has little or no effect on the demand for a product, it is inelastic.
What is the relation between Public borrowing and price level?
if the increase the public borrowing increase the price level of economy.
What is the output effect and the price effect for an oligopoly?
Since P>MC for an oligopoly, the output effect is that selling one more unit at the sales price will increase profit.The price effect is that an increase in production will increase the total amount sold, which will decrease the price and decrease the profit on all other units sold.If the output effect is greater than the price effect, the owner will increase production.If the price effect is greater than the output effect, the owner will not increase production (and may even decrease production).Oligopolists will continue to increase or decrease production until these marginal effects balance.
What is the price-level effect?
The change in the interest rate due to a change in the price level.
An increase in supply will have what effect on equilibrium price and quantity?
Increase in supply in the face of steady demand will result in lower price.
If a price increase has little or no effect the demand for the product is?
When a price increase has little or no effect on the demand for a product, it is inelastic.
What is the relation between Public borrowing and price level?
if the increase the public borrowing increase the price level of economy.
What is the output effect and the price effect for an oligopoly?
Since P>MC for an oligopoly, the output effect is that selling one more unit at the sales price will increase profit.The price effect is that an increase in production will increase the total amount sold, which will decrease the price and decrease the profit on all other units sold.If the output effect is greater than the price effect, the owner will increase production.If the price effect is greater than the output effect, the owner will not increase production (and may even decrease production).Oligopolists will continue to increase or decrease production until these marginal effects balance.
An increase in the aggregate price level will increase?
a clause in a contarct that automatically increases wages to account for increases in the price level
What is the price-level effect?
The change in the interest rate due to a change in the price level.
What is the likely effect of this high demand on gasoline prices?
The Price of the gasoline with increase : D
An increase in supply will have what effect on equilibrium price and quantity?
Increase in supply in the face of steady demand will result in lower price.
There is Increase in price of salt explain its effect on its demand?
help me
What does the effect of rate of interest on bonds?
it will increase the price of bonds
What would happen to the price level if AD decreased?
If AD increased, all else being equal, the price level would increase.
What will happen to the equilibrium price level and real GDP if aggregate demand and aggregate supply both decreases?
AD INCREASES AS DECREASES As the AD/AS model exhibits (exactly the same as Demand and Supply model except Price Level instead of Price and output or real GDP instead of quantity) an increase in AD leads to an inrease in both price level and output. Imagine if there is an increase in demand for tomatoes. According to demand and supply the price of tomatoes will increase. Expand this on a macro scale. When the Aggregate demand for goods and services increase, this pushes the price up. Also in response to this increase in demand, producers will produce more of the good to take advantage of the increased demand, leading to an increase in real GDP. If AS decreases, goods become more scarce and as long as demand is fixed, the price will increase. 'WE PAY MORE MONEY FOR RARE THINGS'. Furthermore, because there is less supply output will decrease. Putting these effects together, both will lead to an increase in price level. The effect on output depends on which force is larger.
What terms is defined as increase or decrease in purchasing power brought on by changing in price?
income effect
