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5 Cards in this Set

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A higher price level reduces the real value of purchasing power of the public's accumulated savings balances, causing less consumption
Real balances effect
Aggregate demand slopes downward because
-Real-balances effect
-Interest-rate effect
-Foreign purchases effect
An increase in money demand drives up the price to get that money, reducing the amount of real output demanded
Interest-rate effect
A rise in price level reduces the amount of U.S. goods demanded as net exports
Foreign purchases effect
Productivity equation
Productivity = total output/total inputs