There are several reasons why this quantity's curve is downward sloping.
The Kaleckian growth model holds that changes in this quantity can permanently change utilization rates. Â The Pigou effect balances drops in this quantity by accounting for greater wealth, shifting the IS curve in response to a drop in this quantity shifting the LM curve to the left. Â This quantity is equal to output and plotted on the vertical axis in the (*) Keynesian Cross diagram. Â This quantity's counterpart is plotted as near horizontal until the point of full employment, when it becomes near vertical, implying that increases in this quantity will lead primarily to increased output if the economy is not at full employment and primarily to increased prices if it is. Â There are several reasons why this quantity's curve is downward sloping. Â For 10 points, name this measure for the total demand of an economy.
The Kaleckian growth model holds that changes in this quantity can permanently change utilization rates.
aggregate demand [prompt on "effective demand;" do not accept or prompt on "demand"]