What Are the Substitution Effects That Affect Aggregate Demand

question 237

Essay

What are the substitution effects that affect aggregate demand?

---

Definitions:

Investment Opportunity

An asset or item that presents a potential for a return on investment, such as stocks, bonds, or real estate.

Minimum Required Rate

The lowest return acceptable on an investment, reflecting the investor's risk appetite and cost of capital.

Net Operating Income

A rephrased description: Operating profit after deducting operating expenses but before interest and taxes.

Operating Assets

Assets that are used by a company in its day-to-day operations to generate revenues, such as buildings, machinery, and equipment.