8. Aggregate Demand 36

Question 0

Aggregate demand

Answer 0

The total of all demands or expenditures on the economy at any given time.

Question 1

Aggregate

Answer 1

The sum or total

Question 2

Aggregate demand =

Answer 2

AD= CONSUMPTION + INVESTMENT + GOV SPENDING + EXPORTS MINUS IMPORTS

AD= C+I+G+(X-M)

Question 3

Aggregate demand curve

Answer 3

Shows the relationship between the price level and equilibrium national income. As the price level rises the equilibrium level of national income falls

Question 4

Multiplier

Answer 4

The figure used to multiply a change in autonomous expenditure, such as investment, to find the final change in income. It is the ratio of
The final change in income to the initial change in autonomous expenditure.

Question 5

Multiplier effect

Answer 5

An increase in investment or any other autonomous expenditure will lead to an even greater increase in income