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ECO 360 Week Four Chapter Summary

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Issue:

Business

 

Written by:

James T

 

Date added:

December 17, 2013

 

Level:

University

 

Grade:

A

 

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4 / 921

 

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9378 times

 

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There are three basic reasons for the downward sloping aggregate demand curve. These are Pigou's wealth effect, Keynes's interest-rate effect, and Mundell-Fleming's exchange-rate effect (Author Unknown, 2008). There is another major model that is useful for explaining the nature of the aggregate demand curve...
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This model is called the IS-LM model after the two curves that are involved in the model. The IS curve describes equilibrium in the market for goods and services where Y = C(Y - T) + I(r) + G and the LM curve describes equilibrium in the money market where M/P = L(r,Y). Combining AD and AS Supply Curves (Author Unknown, 2008)...
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General issues of this essay:
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