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I need help for the following questions and be sure to consider alternative perspectives as you answer the problems. Explain why a change in one
I need help for the following questions and be sure to consider alternative perspectives as you answer the problems.
- Explain why a change in one component of aggregate demand will cause the aggregate demand curve to shift by a multiple of the initial change
- "When the price level falls, people's wealth increases. When wealth increases, the real volume of consumption increases. Therefore, a decrease in the price level will cause the aggregate demand curve to shift to the right." Do you agree? Explain
- How would an increase in the supply of labor affect the natural level of employment and potential output? How would it affect the real wage, the level of real GDP, and the price level in the short run? How would it affect long-run aggregate supply? What kind of gaps would be created?
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