Asked by Rafaiel Ghazaryan on Jun 10, 2024
Verified
In general, aggregate demand depends only on prices and total income and not on income distribution.
Aggregate Demand
The total demand for all goods and services within a specific economy at a given overall price level and in a given time period.
Income Distribution
Refers to the way total personal income is distributed among individuals or households in an economy, affecting economic inequality.
- Acquire knowledge on the synthesis of singular demand curves into a cumulative market demand curve.
Verified Answer
ZK
Zybrea KnightJun 10, 2024
Final Answer :
False
Explanation :
Aggregate demand can be influenced by income distribution because changes in how income is distributed across different groups in the economy can affect overall spending patterns. For instance, if more income is concentrated among wealthier individuals, who have a lower marginal propensity to consume, aggregate demand could be lower compared to a more equitable income distribution that supports higher consumption levels among a broader base of the population.
Learning Objectives
- Acquire knowledge on the synthesis of singular demand curves into a cumulative market demand curve.