Cards (32)

    • What is the definition of aggregate demand (AD)?
      Total demand for goods
    • Aggregate Demand (AD) is the total demand for goods and services in an economy at a given price level and time period
    • Consumption includes both durable and non-durable goods.
    • What does investment in aggregate demand refer to?
      Business spending on capital
    • Government Spending (G) includes expenditures on public goods and services such as education and healthcare
    • Net exports are calculated as exports minus imports.
    • What is the formula for aggregate demand?
      AD = C + I + G + (X – M)</latex>
    • Match the component of AD with its definition:
      Consumption (C) ↔️ Household spending on goods
      Investment (I) ↔️ Business spending on capital
      Government Spending (G) ↔️ Public sector expenditures
      Net Exports (X – M) ↔️ Exports minus imports
    • What does consumption in aggregate demand represent?
      Household spending on goods
    • Positive net exports increase aggregate demand, while negative net exports decrease
    • The formula for aggregate demand is AD = C + I + G + (X – M).
    • Which component of AD includes public sector spending on infrastructure?
      Government Spending (G)
    • Household spending on goods and services is referred to as consumption
    • Exports add to aggregate demand, while imports subtract from it.
    • What is the mathematical expression for aggregate demand?
      AD=AD =C+ C +I+ I +G+ G +(XM) (X – M)
    • Positive net exports increase aggregate demand, while negative net exports decrease
    • What is the definition of net exports in the context of aggregate demand?
      Exports minus imports
    • The aggregate demand formula is expressed as AD = C + I + G + (X – M)
    • What type of spending does consumption refer to in aggregate demand?
      Household spending
    • What type of spending does investment refer to in aggregate demand?
      Business spending
    • Net exports increase aggregate demand if they are positive.
    • What is aggregate demand defined as?
      Total demand for goods
    • Order the components of aggregate demand from most to least common:
      1️⃣ Consumption
      2️⃣ Investment
      3️⃣ Government Spending
      4️⃣ Net Exports
    • What are examples of government spending that contribute to aggregate demand?
      Infrastructure, education, healthcare
    • What does the aggregate demand curve illustrate?
      Price level vs. quantity demanded
    • A movement along the AD curve is caused by a change in the price level.
    • What are factors that can shift the aggregate demand curve?
      Consumer confidence, investment, government spending, net exports
    • A movement along the AD curve shifts the entire curve to the left or right.
      False
    • What does higher consumer confidence do to the aggregate demand curve?
      Shifts it to the right
    • What does increased investment spending do to the aggregate demand curve?
      Shifts it to the right
    • What does higher government spending do to the aggregate demand curve?
      Shifts it to the right
    • Higher net exports shift the aggregate demand curve to the right.