Aggregate demand Flashcards
1
Q
what is AD
A
total spending on goods and services
2
Q
what are the components
A
Consumption+ Investment+ Government spending+ Exports- Import
3
Q
consumption
A
the money consumers pay for goods and services
4
Q
investment
A
business investing in new resources such as new buildings
5
Q
government spending
A
spending by the state on public and merit goods
6
Q
exports
A
products sold to other countries resulting in an injection of money
7
Q
imports
A
products bought from other countries a leakage of money
8
Q
what goes on the axis of a diagram showing AD
A
price level
real GDP
