What is the negative relationship between ad and price level?

Question

What is the negative relationship between ad and price level? What are the types of money? How banks create money?

Expert · Accepted Answer

ECON FINAL STUDY GUIDE   Chapter 9&10­ AD&AS  Aggregate Demand­ total demand for final goods and services   Aggregate Supply­ total supply of final goods and services    AD= C+I+G+NX Consumption  Investment   Government Spending  Net exports    Negative relationship between AD and price level:  • Wealth effect  • Interest rate effect  • International trade effect   Net exports: higher price level ­> exports fall, imports rise ­> net exports falls ­> total   spending falls     International trade effect­ occurs when a change in price level leads to change in quantity   of net exports demanded   Consumption spending: higher price level ­> value of money and bonds falls ­>   household wealth falls ­> consumption spending falls ­> total spendin

What is the negative relationship between ad and price level?

What is the negative relationship between ad and price level? Description

School: Tulane University

Department: Engineering

Course: Intro to Macroeconomics

Professor: Toni weiss

Term: Spring 2017

Tags: Econ

Cost: 50

Name: ECON FINAL STUDY GUIDE

Description: study guide for final

Uploaded: 05/04/2018

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What is the negative relationship between ad and price level?
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