Theme 23 Aggregate Demand Flashcards
1
Q
AD
A
Total demand of goods nd services or expenditure, of a nation at a given price level over a period of time.
Consumption+Investment+govt spending+ (X-M)
2
Q
Aggregate demand curve
A
Shows the relationship btw the PL and equilibrium national income. As the PL rises the equilibrium level of nation income falls.
3
Q
Domestic economy
A
The economy of a single country.
4
Q
Changes in PL have 3 effects (movements along the curve)
A
- Real Wealth Effect
- Exchange Rate Effect
- Interest Rates Effect
5
Q
Shift in the AD curve is caused by …?
A
Increase in consumption, investment, govt spending, or net exports.
