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Questions tagged [aggregate-demand]

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Savings "identically" equal to investment?

So there's a multiple choice question that says, savings varies positively with the level of income and savings is IDENTICALLY equal to investment. Find the slope of the IS curve. Options are : ...
viktor nikiforov's user avatar
1 vote
1 answer
59 views

Why are sticky wages an explanation for an upward sloping SRAS curve?

I often see that the theory of sticky wages is cited as an explanation for an upward sloping short run aggregate supply curve. I understand that if aggregate demand shifts to the left, there will be ...
toomanyfeet's user avatar
2 votes
1 answer
220 views

why does consumption not have a positive multiplier?

My tutor said that only $I$, $G$, $X-M$ in AD can include a multiplier and that consumption does not create a multiplier effect. I understand that these factors affect my ability to consume and that ...
anon's user avatar
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1 answer
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movements along and shifts of the AD curve

i dont understand how the reason that i've stated below causes a shift of the AD curve while the other causes a movement along when they're almost the same thing. how does contractionary monetary ...
anon's user avatar
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two real gdp at the same price level in ad as model

in a macro book of arnold i see an agg demand-supply model where it seems above the equilibrium price level there are two real gdp for the same price level. the book then goes on to explain that there ...
Adnan's user avatar
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0 answers
9 views

does the income-output-expenditure method of getting real gdp hold in ad as model

in the ad as model, it seems there's two different real gdp for a given price level when in disequilibrium. does this mean the real gdp counted from the demand side is not equal to the real gdp ...
Adnan's user avatar
  • 1
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0 answers
11 views

difference between quantity of real gdp demanded and quantity of real gdp supplied and real gdp

I can't seem to understand why the agg demand curve and agg supply curve both have real gdp at the horizontal axis and price level at the vertical axis. How can the relation between two same ...
Adnan's user avatar
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0 answers
21 views

What would be the theoretical outcome of expansionary fiscal policy... on the business cycle?

Hello all, So, I came across this question on my economics final. It immediately struck me as odd. It's asking what effect expansionary fiscal policy would have in the Aggregate Demand - Aggregate ...
Haythem19's user avatar
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0 answers
62 views

Non Continuous Walrasian Demand Function

I have a silly question. I’m trying to solve some exercises that have to do with the walrasian demand function $x(p,w)$ and excess demand function $z$. More especifically, I’m asked to show that there ...
Martin 's user avatar
2 votes
1 answer
57 views

Why does a positive output gap shift the short run AS curve instead the demand curve?

I'm reading through Mishkin "The Economics of Money, Banking, and Financial Markets". In chapter 23 (of the global 13th edition), they introduce the AS/AD framework. What confuses me is the ...
swissy's user avatar
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0 answers
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The proofs in W.M.Gorman "Community preference fields''

I am reading W.M.Gorman "Community preference fields''. However, many of the proofs are omitted or only in outlines. Do you know some other helpful references? Thank you.
Saito's user avatar
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Help with Macroeconomics Question: IS-LM Model [closed]

I know this is supposed to be a simple question, but I need to check the answers for it and as it was a past exam question I do not have the results for it.If anyone can help out, that would be ...
Antony Mark's user avatar
0 votes
1 answer
426 views

Why is the horizontal axis 'Real GDP' in Aggregate Demand Curve

In the aggregate demand curve, the horizontal axis is labelled 'Real GDP'. Why doesn't it represent 'Quantity Demanded'? After all the curve is the aggregate demand curve, so we have to show some ...
MangoPizza's user avatar
6 votes
3 answers
874 views

Does the Sonnenschein-Mantel-Debreu theorem fundamentally undermine Mises' Economic Calculation Argument?

So recently I have been thinking a lot about this fundamental question: Does the Sonnenschein-Mantel-Debreu theorem disprove the "Law of Demand"? Basically, the Sonnenschein-Mantel-Debreu ...
Robotic_Cow's user avatar
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1 answer
31 views

How to derive the FIRST equation from the SECOND one?

First equation Dynamic Aggregate Demand How the derive from second equation the first one?
Ibrahimsahinkaya's user avatar
2 votes
1 answer
45 views

Price rigidity and demand-constrained economies

In this note, http://web.mit.edu/krugman/www/MINIMAC.html, Krugman develops a simple model to introduce the idea that whenever an economy experiences price rigidity then this economy is demand-...
BAL's user avatar
  • 457
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1 answer
246 views

Aggregate demand and Real GDP

I understand that aggregate demand is the demand for all goods and services in an economy. However, I later found out that aggregate demand and real GDP are calculated using the same formula, so does ...
MathGeek's user avatar
  • 117
2 votes
1 answer
117 views

GDP doesn't add up in FED data - why?

To visualise the formula: $$Y=C+I+G+NX$$ I downloaded the FED data and plotted it, only to discover the two curves progressively diverge (see chart below). What am I missing? thank you! $Y$ = https://...
elemolotiv's user avatar
2 votes
1 answer
68 views

Concept of Utility in demand systems

I have seen that researchers use different utility function in demand systems estimation such as Stone Geary. What is the role of these utility functions? What are utility function other than stone ...
desi arthshastri's user avatar
1 vote
1 answer
100 views

Trouble at differentiating a consumption function

everyone. This is kind of a basic question, but I have a weak background on calculus and I already tried to figure this out by myself for a few hours without success. So, I am finally appealing on you ...
PedPg's user avatar
  • 13
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1 answer
41 views

New Keynesian IS curve: question about time dependence

A simple version of the new-Keynesian IS cuve is given as follows: $$ \ln Y_{t} =\ln Y_{t+1} -\frac{1}{\theta} r_t. $$ Here $r_t$ is the real interest rate and $1/\theta$ is the cross elasticity of ...
Ma Joad's user avatar
  • 131
2 votes
1 answer
277 views

The new Keynesian IS curve: What determines output?

The New Keynesian IS curve can be described by the following (log-linearisation around the steady-state):$$y_t=E_t(y_{t+1})- \frac{1}{\theta}(i_t - E_t\pi_{t+1}-\rho)$$ where $\displaystyle\frac{1}{\...
An old man in the sea.'s user avatar