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Suppose that households become pessimistic and begin to cut back on their spending to build up their cash reserves. As a result, the growth rate of the _____ falls and the _____ shifts to the left.
money supply; aggregate demand curve
velocity of money; Solow growth curve
money supply; Solow growth curve
velocity of money; aggregate demand curve
velocity of money; aggregate demand curve

Sagot :

As a result, the growth rate of the velocity of money falls and the  aggregate demand curve shifts to the left.

What occurs when the savings rate rises?

A higher steady-state capital stock and level of output do follow from a higher saving rate. The growth rate briefly increases as production changes from a lower to a higher steady-state level. in some more recent growth theories.

Why does the curve for aggregate demand slope downward?

The total of consumption, investment, government purchases, and net exports at each price level in every period is represented by the aggregate demand curve. Due to the wealth effect on consumption, the interest rate effect on investment, and the impact of global commerce on net exports, it slopes downward.

To learn more about Demand Curve here:

https://brainly.com/question/13828738

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