Unit 3: Topic 14: Variations in economic activity: aggregate demand and aggregate supply

14.1-14.5

Define consumption (C)

Measurement of all domestic household spending on goods and services within a given time period

State what factors affect consumption (C)

consumer confidence & income levels

Define Investment (I)

gross domestic private investment; measurement of total spending and investments made by firms on capital equipment

State what factors affect investment (I).

• future economic predictions

• interest rates

• subsidies

• taxes

• business confidence

Define net exports (X-M) or (Xn)

total income earned from the sales of exports (X) to foreigners - total amount spent by