Chapter 34

Chapter 34 is similar to chapter 33 in that both go in depth on short run fluctuations in the economy. This chapter looks at the reasons why the aggregate demand curve is sloped downward. The most important reason it slopes downward is because of the interest rate effect. This says that since the price level is lower less people want to hold money on them and therefore they will want to lend it. This causes the interest rate to go down. So far this chapter is not too hard to understand. I give it a 1.5 out of 3.