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If a quantity increases as a second quantity increases and decreases as the second quantity decreases the two quantities are said to be?
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∙ 15y ago
ballai
Wiki User
∙ 15y ago
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What happens to price and quantity when both demand and supply decrease. And graphically illustrate?
The first graph is clear. But the second graph shows demand's relation to price and supply. Now let's say supply decreases; then p will rise (q = constant, p = >). If demand decreases, then p will decrease as well. When both curves decrease, you will face different situations. How much have they decreased is the main question. Has demand decreased more or less than supply? Let's assume this. So then price will decrease as well (compared to Poriginal).
Why do aggregate demand curve slope downward explain briefly?
The first reason for the downward slope of the aggregate demand curve is Pigou's wealth effect. Recall that the nominal value of money is fixed, but the real value is dependent upon the price level. This is because for a given amount of money, a lower price level provides more purchasing power per unit of currency. When the price level falls, consumers are wealthier, a condition which induces more consumer spending. Thus, a drop in the price level induces consumers to spend more, thereby increasing the aggregate demand. The second reason for the downward slope of the aggregate demand curve is Keynes's interest-rate effect. Recall that the quantity of money demanded is dependent upon the price level. That is, a high price level means that it takes a relatively large amount of currency to make purchases. Thus, consumers demand large quantities of currency when the price level is high. When the price level is low, consumers demand a relatively small amount of currency because it takes a relatively small amount of currency to make purchases. Thus, consumers keep larger amounts of currency in the bank. As the amount of currency in banks increases, the supply of loans increases. As the supply of loans increases, the cost of loans--that is, the interest rate--decreases. Thus, a low price level induces consumers to save, which in turn drives down the interest rate. A low interest rate increases the demand for investment as the cost of investment falls with the interest rate. Thus, a drop in the price level decreases the interest rate, which increases the demand for investment and thereby increases aggregate demand. The third reason for the downward slope of the aggregate demand curve is Mundell-Fleming's exchange-rate effect. Recall that as the price level falls the interest rate also tends to fall. When the domestic interest rate is low relative to interest rates available in foreign countries, domestic investors tend to invest in foreign countries where return on investments is higher. As domestic currency flows to foreign countries, the real exchange rate decreases because the international supply of dollars increases. A decrease in the real exchange rate has the effect of increasing net exports because domestic goods and services are relatively cheaper. Finally, an increase in net exports increases aggregate demand, as net exports is a component of aggregate demand. Thus, as the price level drops, interest rates fall, domestic investment in foreign countries increases, the real exchange rate depreciates, net exports increases, and aggregate demand increases. source: http://www.sparknotes.com
What are the two aspects of demand?
The first part is demand itself (as influenced by type of good, choice and income). The second part is Quantity demands
What is an inverse relationship between two variables?
An inverse relationship is one in which as the value of one variable increases, the value of the second variable decreases. For example, in the equation y = 1/x, as y gets bigger, x gets smaller and as x gets bigger, y gets smaller.
How might you know that you are at a point of diminishing returns?
You may know this when, by increasing the quantity of the good or action involved in the return, you find the increase in return is falling. Alternatively, you may model its function and find its second derivative is negative.
What is the correlation between two quantities?
It is a measure of the extent to which a linear change in one quantity is accompanied by a linear change in the other quantity. Note that only linear changes are measured and that there is no causality.
How does the acceleration of a mass change if the force applied to it increases or decreases?
When the applied force increases, the acceleration increases When the applied force decreases, the acceleration decreases. This can be explained using Newton's second law of motion. F = ma
How a rate is a measure of one quantity per unit of another quantity?
That's basically what rate means - a comparison of two proportional quantities.
What is A rate which the second quantity in the numerator the denominator or both?
A rate is the ratio of both those quantities.
How does a change in one quantity affect the change in other quantities?
Feedback in general is the process in which changing one quantity changes a second quantity, and the change in the second quantity in turn changes the first.Positive feedback amplifies the change in the first quantity while negative feedback reduces it.....
How do you find the percent?
Usually you compare two quantities, to find out how much percent one is of another. The second quantity is often a total, but it need not be so. Divide the first quantity by the second, and multiply the result by 100, to get the percentage.
When a graph of one quantity versus another results in a straight line the quantities are?
the rate of change of the first quantity is same as the change of the second quantity. So the graph is a straight line . But as far as quantity is concerned it can be anything provided they both increase in the same rate...
Examples of vector quantities?
Vector quantities are quantities that have directionality as well as magnitude. Displacement (meters North) vs Distance (meters) Velocity (meters per second North) vs Speed (meters per second)
What is a ratio related to science?
In science, the ratio of two quantities is the value of the first quantity divided by the value of the second one. For example, the ratio of 10m to 5m is 2.
What does it mean when you say that the acceleration produced is inversely proportional to mass?
This is true only if the resultant force is constant. From Newton's second law, F = ma where F is resultant force m is mass and a is acceleration a = F/m => a is inversely proportional to m This means that when m increases, a decreases and when m decreases, a increases.
What is difference between base quantity and derived quantity?
Base quantities (Scalar Quantities) :Independent quantities who have single standard units.- time /seconds-distance/metersDerived Quantities (Vector Quantities):Quantities derived by multiplying or dividing 2 base quantities.- Velocity = distance/timeunit of Velocity = m/s
Which property says that if a first quantity equals a second quantity then the second quantity equals the first quantity?
That's the reflexive property of equality.
