3.2 - aggregate demand + supply

Question 1

factors causing consumer spending to change (CONSUMPTION) (7)

Answer 1

• confidence
• unemployment
• real interest rates
• wealth
• personal taxes
• lvl of household indebtedness
• expectations of future price lvl

Question 2

factors that cause investments to change (5)

Answer 2

• interest rates
• business confidence
• business taxes
• lvl of corporate indebtedness
• technology

Question 3

tariffs

Answer 3

taxes imposed on imports

Question 4

factors that cause net exports to change (3)

Answer 4

• income of trading partners
• exchange rates

Question 5

aggregate supply

Answer 5

the total output that all firms in a country are able to produce at any given price level.

Question 6

SRAS (short run aggregate supply)

Answer 6

• supply of the nation in the short run, or when resource prices for most firms will remain constant.