How Does a Rise in Real Income Affect Aggregate Demand

question 102

Multiple Choice

How does a rise in real income affect aggregate demand?

• A) Y ↑ implies Yd ↑ implies Im ↑ implies CA ↓ implies AD ↓, but Y ↑ implies Yd ↑ implies C ↑ implies AD ↑ by more.
• B) Y ↑ implies Yd ↑ implies Im ↓ implies CA ↓ implies AD ↓, but Y ↑ implies Yd ↑ implies C ↑ implies AD ↑ by more.
• C) Y ↑ implies Yd ↑ implies Im ↑ implies CA ↑ implies AD ↑, and Y ↑ implies Yd ↑ implies C ↑ implies AD ↑.
• D) Y ↑ implies Yd ↑ implies Im ↑ implies CA ↓ implies AD ↓, but Y ↑ implies Yd ↑ implies C ↑ implies AD ↑ by less.
• E) Y ↑ implies Yd ↑ implies Im ↓ implies CA ↓ implies AD ↓, but Y ↑ implies Yd ↑ implies C ↑ implies AD ↑ by less.

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Definitions:

Relevant Costs

Costs that are directly affected by a specific managerial decision and thus should be considered in the decision-making process.

Voice Activated Snooze

A feature in alarms or electronic devices that allows users to pause the alarm or notification by using their voice, providing a hands-free way to snooze.

'Indestructible' Aluminium

A marketing term or descriptor for aluminium products designed for high durability and resistance to damage.

Opportunity Cost

The value of the next best alternative foregone as a result of making a decision.