Comments on: A common error – confusing the money market and market for foreign exchange http://welkerswikinomics.com/blog/2008/05/03/a-common-error-confusing-the-money-market-and-market-for-foreign-exchange/ for students and teachers of Economics Thu, 09 Feb 2012 09:13:55 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: Christina Hu http://welkerswikinomics.com/blog/2008/05/03/a-common-error-confusing-the-money-market-and-market-for-foreign-exchange/comment-page-1/#comment-5072 Christina Hu Sun, 04 May 2008 00:34:17 +0000 http://welkerswikinomics.com/blog/?p=443#comment-5072 The first thing I noticed was Zurich has a really nice sky. And the bright pink pearl tower is gone. Eager to move, eh? I always get confused on the determinants of AD; I know what they are, but when it comes to a test question I don't think like an economist and try to rationalize instead. For D, I wrote that AD would increase because, if the economy self-corrected, wouldn't it naturally start to experience growth again (the expansion part of the business cycle), meaning that rGDP per capita increases, and people have more money to consume with, which would cause overall AD to rise? The first thing I noticed was Zurich has a really nice sky. And the bright pink pearl tower is gone. Eager to move, eh?

I always get confused on the determinants of AD; I know what they are, but when it comes to a test question I don't think like an economist and try to rationalize instead. For D, I wrote that AD would increase because, if the economy self-corrected, wouldn't it naturally start to experience growth again (the expansion part of the business cycle), meaning that rGDP per capita increases, and people have more money to consume with, which would cause overall AD to rise?

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