demand

Question 1

What is a market?

Answer 1

Any arrangement where buyers and sellers interact to carry out an economic transaction.

Question 2

Law of demand

Answer 2

A law stating that as the price of a good falls, the quantity demanded will increase over a certain period of time, ceteris paribus.

Question 3

Relationship between an individual’s demand and market demand

Answer 3

Total market demand = the sum of all the individual demand curves (for the same good)

Question 4

AD

Answer 4

Aggregate demand: Planned spending on domestic goods and services at different average price levels, per period of time. Consists government expenditures plus net exports.

Question 5

SRAS

Answer 5

Short-run aggregate supply: The total quantity of real output (real GDP) offered at different possible price levels in the short run (when wages and other resource prices are constant).