Aggregate demand

Question 1

what is Aggregate Demand ?

Answer 1

Aggregate Demand is the total demand for all goods and services in an economy at any given price level over a period of time

Question 2

what is the Formula for Aggregeate Demand ?

Answer 2

AD = C + I +G +(x-m)

Question 3

what are factors that affect Exports and Imports?

Answer 3

• exchange rates
• trade barrier
• relative cost of good
• Abillity to produce the good

Question 4

what is demand Pull inflation ?

Answer 4

-Demand Pull inflation is caused by excessive demand in the economy

Question 5

what is Aggregate Supply ?

Answer 5

The total Amount of good s and services that firms are willing to supply at a set price within an economy

Question 6

what is Short Run and Long run Supply ?

Answer 6

Short run= Factors of production are fixed

long run = FOP varibale

Question 7

what is the Multiplier? and the formula ?

Answer 7

The multiplier is that the intial change in AD can have much greater Final impact on the Level of GDP

1
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(leakages)

e.g an increase in investment, could lead to an increase in consumption

Question 8

what determines to level of saving

Answer 8

• intrest rates
  confidence
• inflation

Question 9

what determines the level of Investment

Answer 9

• Intrest rates
  confidence
  government incentives
  economic growth