Wealth Effect Fiscal Policy Actions and Foreign Purchases Questions

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Wealth Effect Fiscal Policy Actions and Foreign Purchases Questions

1.) Explain each of the following:the Wealth Effect, the Interest rate effect, and the Foreign Purchases effect based on how their individual effect justifies the down sloping nature of the aggregate demand curve.

2.) Explain the fiscal policy actions that would cause a rightward shift (an increase) in Aggregate Demand.

3.) Explain the monetary policy actions that would cause a rightward shift (an increase) in Aggregate Demand.

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