Maro 2 - AD Flashcards
Aggregate demand
The total quantity of demand in an economy at a given price at a given time
Exports
Goods or services sold to foriegners that bring income into the country
Consumption
Consumer spending on goods and services
Investment
Spending by businesses on capital goods, which leads to the creation of consumer goods
Government spending
Spending by the government for the provision of goods and services
Net exports
Exports - Imports
Imports
Goods and services bought from forigners that takes income out of the country
Circular flow
A model of the economy which shows the flow of goods and services and money around the economy
Net investment
Investment adjusted for depreciation
Depreciation
The reduction in the value of machinery overtime
National ouptut
The value of the flow of goods and services from firms to households
National expenditure
The value of spending by households on goods and services
Savings
The decision by consumers to postpone consumption
WIthdrawal
Spending power leaving the circular flow of income resulting from savings, taxation and imports
Gross investment
Total investment
