32) Aggregate demand Flashcards by Max Brown | Brainscape

Q

What is AD?

A

Consumption + Investment + Gov spending + (Exports - Imports)

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Q

Why does AD slope downwards?

A

As the price level rises, the real value of income falls and consumers are less able to buy what they want or need

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Q

What are the key causes of shifts in AD?

A

Changes to monetary policy
Changes to government fiscal policy
Business and consumer confidence

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