Wealth and Substitution Effects Explain Why the Aggregate Demand Curve

question 200

True/False

Wealth and substitution effects explain why the aggregate demand curve has a positive slope.

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Definitions:

Higher-order Needs

Needs that go beyond the basic physical requirements, such as the need for esteem, affection, belonging, and self-actualization.

Self-actualization

The achievement of realizing one’s abilities and potentials, seen as a universal desire or motivation inherent in all individuals.

Content Theories

Content theories of motivation focus on identifying the specific factors that motivate individuals, such as needs, desires, and goals.

Individual Needs

Basic or psychological requirements that motivate behavior and are essential for personal wellbeing and growth.