Aggregate Demand Flashcards
1
Q
What is aggregate demand
A
Total planned spending of g/s in an economy at given time + price
2
Q
Factors effecting AD (5)
A
Income
Interest rates
Consumer sonfidence
Taxes
Unemployment
3
Q
Formula of AD
A
C + I + G + (E-X)
4
Q
What is gdp (2)
A
Measures the value of real output of the economy over a period of time
A rise in GDP indicates economic growth
5
Q
What is nominal gdp
A
The monetary value of all goods and services produced in the economy
6
Q
What is real gdp
A
The nominal value of GDP adjusted for inflation
7
Q
What does ppp measure (2(
A
The total amount of goods and services that a single unit of a country’s currency can buy in another country
Used when assessing relative living standards between countries
