Aggregate Demand & Supply

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14 Terms

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Aggregate Demand

TOTAL SPENDING on new, domestically produced final goods and services

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Aggregate Supply

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Why is the aggregate demand curve downward sloping? (3)

  1. wealth effect 

  2. interest rates 

  3. international competitiveness 

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factors of AD curve: consumption (5) 

  1. consumer confidence

  2. interest rates and cash flow 

  3. income tax

  4. household indebtedness

  5. wealth 

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factors of AD curve: investments (?)

  1. business confidence 

  2. legislations/institutional changes 

  3. business taxes 

  4. interest rates 

  5. technology 

  6. spare capacity 

  7. corporate indebtedness 

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