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INCOME EFFECT: One of two reasons for the law of demand and the negative slope of the market demand curve (the other is the substitution effect). The income effect results because a change in price gives buyers more real income, or the purchasing power of the income, even though money or nominal income remains the same. This causes changes in the quantity demanded of the good.
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AGGREGATE DEMAND AND MARKET DEMAND The aggregate demand curve, or AD curve, has similarities to, but differences from, the standard market demand curve. Both are negatively sloped. Both relate price and quantity. However, the market demand curve is negatively sloped because of the income and substitution effects and the aggregate demand curve is negatively sloped because of the real-balance, interest-rate, and net-export effects.
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In the late 1800s and early 1900s, almost 2 million children were employed as factory workers.
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"I not only use all the brains that I have, but all that I can borrow. " -- Woodrow Wilson, 28th US president
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WE
Walrasian Equilibrium
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