Construct an aggregate demand curve.
Explain how the AD curve can be shifted by changes in investment due to factors including interest rates, business confidence, technology, business taxes and the level of corporate indebtedness.
IN 1946 Gyorgy Faludy, a Hungarian poet, received 300bn pengo for a new edition of his works. The sum would have been worth $60bn before the second world war. But after the Nazis departed with Hungary's gold reserves and the Russians occupied its territory, the country's currency was not what it was-and becoming even less so.
Illustration by S. KambayashiWHEN people look back on a bubble, they tend to blame the mess on crookery, greed and the collective insanity of others. What else but madness could explain all those overpriced Dutch tulips? With hindsight, today's mortgage disaster seems ridiculously simple.
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