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Why Does Aggregate Demand Shift Outward by a Greater Amount

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Why does aggregate demand shift outward by a greater amount than the initial change in spending?


Definitions:

Alderfer's Relatedness Needs

A component of Alderfer's ERG theory focusing on the interpersonal relationships and social needs of individuals within an organization.

Motivation Theory

A set of theories that aim to explain what drives individuals to initiate, direct, and sustain behaviors and actions to achieve specific goals.

Hierarchical

An organizational structure where individuals or entities are ranked according to levels of authority or status, from the highest to the lowest.

Motivation Theories

A set of theories aiming to explain what drives individuals to initiate, direct, and persist in behaviors or actions to achieve certain objectives.

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