Lecture 7 - Aggregate Demand ]

Question 1

What are the 4 components of aggregate demand?

Answer 1

1) Components
2) investment
3) Government expenditure
4) imports

Question 2

What factors impact consumer consumption?

Answer 2

Disposable income - The money left after tax and other deducations
Expected future incomes 
The financial system 
Expectations
Tastes and attitudes

Question 3

What is marginal prosperity to consume?

Answer 3

• The promotion of a rise in income that goes on consumption

Question 4

What are the determinants of investment?

Answer 4

• Increased consumer demand
• Expectations
• Rate of interest and availability of finance

Question 5

What is the difference in current and capital spending?

Answer 5

Current is spending on goods consumed in the short term where as capital spending it investment in long term projects

Question 6

What two factors are both imports and exports influenced by?

Answer 6

1) National income

2) Exchange rates

Question 7

What is gross domestic final expenditure?

Answer 7

the total expenditure by a country residents on final goods and services
- Includes imports BUT EXCLUDES EXPORTS

Question 8

What is the marginal prosperity to consumer and withdraw?

Answer 8

The proportion of any rise in national income that is spent on domestic goods and services

Question 9

What is gross value added?

Answer 9

The sum of all the values added together by all the industries in the economy over a year

Question 10

How do you calculate value added?

Answer 10

GDP- TAXES + SUBSIDIES