3 questions on "shifts of the aggregate demand curve - changes in wealth"
- Firms engage in planned investment to add to their stck of physical capital
- theri incentives to spend increases
- the more they have the less they will feel the need to add more
- When the real value of assets rises,
- the purchasing power the rises,
- their incentive to spend increases
- they consume more
- for example significant rise in the stock market the increases aggregate demand
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