2.2.1 The characteristics of Aggregate demand

0.0(0)
studied byStudied by 0 people
0.0(0)
full-widthCall Kai
learnLearn
examPractice Test
spaced repetitionSpaced Repetition
heart puzzleMatch
flashcardsFlashcards
GameKnowt Play
Card Sorting

1/5

encourage image

There's no tags or description

Looks like no tags are added yet.

Study Analytics
Name
Mastery
Learn
Test
Matching
Spaced

No study sessions yet.

6 Terms

1
New cards

what are the characteristics of aggregate demand?

  • Consumption is consumer spending on goods/services

  • Investment is spending by businesses on capital goods

  • Government spending is spending by the government on providing goods and services 

  • Net exports is exports minus imports (X-M)

2
New cards

what is the definition of aggregate demand?

  • aggregate demand is the total level of spending in the economy at any given price

3
New cards

what does the AD curve look like?

  • a normal demand curve but on the y axis it measures price level and on x axis it measures real GDP

<ul><li><p>a normal demand curve but on the y axis it measures price level and on x axis it measures real GDP</p></li></ul><p></p>
4
New cards

what is a movement (contraction/extension) along an AD curve caused by?

  • a change in prices (inflation or deflation)

5
New cards

what is a positive shift of the AD curve caused by?

  • an increase in consumption, government spending, net exports or investment

6
New cards

what is a negative shift of the AD curve caused by?

  • a decrease in consumption, government spending, net exports or investment