Explain How a Change in Real Wealth Can Sometimes Cause

question 8

Essay

Explain how a change in real wealth can sometimes cause a movement along the aggregate demand curve and how sometimes it can cause a shift of the aggregate demand curve.

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Definitions:

Initial Margin

The minimum amount of equity required to initiate a position in the securities market, often expressed as a percentage of the total investment.

Sell the Stock

The action of disposing of shares in a company.

Margin Call

A demand by a broker for an investor to deposit additional money or securities to cover possible losses.

Initial Margin

The upfront payment required to enter into a trading position as a guarantee against potential losses.