9.2 The Components of Aggregate Demand
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Last updated 9:58 PM on 4/27/23
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6 Terms
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Aggregate demand (AD)
total demand or total spending in an economy in a given period of time
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Aggregate demand (AD) equation
aggregate demand (AD) = consumption (C) + investments (I) + government spending (G) + (exports (X) - imports (X))
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Gross investment
all investment spending
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Net investment
only investment that increases productive capacity
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Budget deficit
government spending > taxation revenue (G > TR)
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Budget surplus
government spending < taxation revenue (G < TR)