Business, 12.03.2021 15:00 martinbricein10
12.1. The wealth effect, interest-rate effect, and exchange-rate effect all help explain why the aggregate demand curve is downward sloping. Phyllis, a fellow student in your Macro class, suggests that the substitution effect that you learned about in Unit 1 also explains why aggregate demand curve is downward sloping. She reasons that since it explains why a market demand curve is downward sloping, it must also be valid for aggregate demand. Explain why Phyllis is wrong.
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12.1. The wealth effect, interest-rate effect, and exchange-rate effect all help explain why the agg...
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