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Recent research suggests that
Substitution Effect
This effect describes the change in consumption patterns due to a change in the relative prices of goods, leading consumers to substitute more expensive items with cheaper ones.
Output Effect
The impact on total output or production resulting from changes in the price level or other economic factors.
Price of Capital
The cost of using capital goods, represented by interest rates, lease payments, or other measures of the cost of borrowing or using capital.
Marginal Revenue Product
The additional revenue generated from employing one additional unit of a resource, such as labor or capital.
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