2.4.3 Equilibrium levels of real national output

Question 1

Aggregate demand

Answer 1

AD = C + I + G + (X - M)
Aggregate demand = Consumption + Investment + Government spending + (Exports - Imports)

The total amount of goods and services demanded in the economy at a given time and price level

Question 2

Aggregate supply

Answer 2

Total planned output of goods and services in an economy at a given time and price level

Question 3

Equilibrium national output

Answer 3

Aggregate demand is exactly equal to aggregate supply

Question 4

Real national output

Answer 4

Nominal national output which has been adjusted for inflation