Suppose the stock market has been rising rapidly for the past five years

Economics Dec 12, 2020

Suppose the stock market has been rising rapidly for the past five years. Some economists argue that the stock market has become "overvalued" and thus a "crash" is imminent. AS a. A rising stock market affects aggregate demand primarily through a wealth effect upon consumption Use the 3-point curve drawing tool to show this effect in the accompanying AD/AS diagram. Carefully follow the instructions above, and only draw the required object. Price Level AD Y Real GDP

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