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Essay text:
This lowered level of disposable income leads to a
decrease in consumption spending as well as a decrease in savings. This
decrease in consumer and government spending causes the total spending to
decrease by a multiplied amount, As a result of the decrease in total spending
the aggregate demand decreases and the aggregate demand curve shifts to the left.
This decrease in consumer and government spending also causes businesses to have
a surplus of inventories. At this point the output is greater than spending and
as a result prices begin to fall. Because of the surplus of goods and falling
prices consumption becomes more desirable to consumers and the level of consumer
spending rises...
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Common topics in this essay:
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