MACROECONOMICS
MACROECONOMICS
14th Edition
ISBN: 9781337794985
Author: Baumol
Publisher: CENGAGE L
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Chapter 9, Problem 2DQ
To determine

To describe: The economical mechanism involved in finding the reasons for some level of real GDP is not equilibrium for the demand section of the economy.

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My friend Marie decides to set aside $200 from her paycheck every month. How will this affect her demand curve? (You don't have to use specific numbers, just explain) When Marie sets aside money from her paycheck, this is the same thing as a decrease in her income. Remember that when income increases, the demand curve shifts outwards to reflect the increase in spending. In this case, Marie's demand curve will shift inwards as she tries to economize more than usual. She will buy fewer goods, even if the prices don't change.  Illustrate in graph
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