Aggregate Demand Flashcards
1
Q
How do you work out aggregate demand?
A
AD= C+I+G+(X-M)
2
Q
Define AD
A
AD is the total demand for goods and services produced at a given PL in a given time period.
3
Q
Why does the AD curve slope downwards from left to right
A
To show the inverse relationship between PL and AD due to:
- the wealth effect
- the interest effect
- the international trade effect
