Aggregate demand and supply Flashcards
Define Aggregate demand
the total demand for a country’s goods and services at a given price level and in a given time period.
define price level
the average of each of the prices of all products produced in an economy
define consumer expenditure
spending by households on consumer products
define investment
spending on capital goods
define government spending
spending by the central government and local government on goods and services
define exports
products sold abroad
define imports
products bought from abroad
define net exports
the value of exports minus the value of imports
define average propensity to consume
the proportion of disposable income spent.
give the three injections
investment
exports
government spending
give the three leakages
saving
imports
taxes
At full employment, national output =
National income = national expenditure
AD =
C + I + G + (X-M)
Equation for APC
Consumption / income
Equation of APS
amount saved / income
