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This Review contains major "Aggregate Demand"- related terms, short phrases and links grouped together in the form of Encyclopedia article.
- Aggregate demand is the total level of demand for goods and services in an economy.
- Aggregate demand is the sum of all demand in an economy.
- Aggregate demand is the total demand for goods and services produced in the economy over a period of time.
- Aggregate demand is a measure of month-to-month growth or contraction of consumer spending, often used as an indicator of economic prosperity.
- Aggregate Demand is one of 51 key economics concepts identified by the National Council on Economic Education (NCEE) for high school classes.
- If this was the only effect, the aggregate demand curve in the diagram would be upward sloping.
- A decrease in government purchases or an increase in taxes shifts the aggregate demand curve to the left.
- Equilibrium price and quantity are found where the aggregate demand and supply curves intersect.
- Model aggregate demand - aggregate supply (AD-AS) with perfectly inelastic (long-run period) and perfectly elastic (short-run period) aggregate supply.
- Economists today reconcile these two views with the model of aggregate demand and aggregate supply introduced in Ch.9.
- Knowing what can cause changes in aggregate demand and aggregate supply helps explain causes of the business cycle.
- The aggregate demand (AD) curve shows that as the price level drops, purchases of real domestic output increase.
- A reduction in aggregate demand causes a decline in real output rather than the price level because prices are -sticky- or inflexible downward.
- Technically, the aggregate demand curve is found by drawing a line (or curve) through Points 1, 2, and 3 on Appendix Figure 11-1b.
- Figure 7-3 illustrates the aggregate demand curve for an economy.
- Give three reasons why the aggregate demand curve slopes downward.
- The builders will have higher disposable income as a result, so consumption, hence aggregate demand will rise as well.
- Finally, expenditure on GDP obviously disregards the creation of credit money by banks and governments, which boosts aggregate demand.
- Equilibrium within the economy occurs where aggregate demand is satisfied by national output.
- Aggregate demand and its derivation from IS-LM model.
- B. Aggregate demand shifts and the aggregate expenditures model (Appendix Figure 11-2): 1.
- Macroeconomic theory today has harmonized the study of aggregate demand and supply with the study of money.
- Keynesian economics, which focuses on aggregate demand to explain levels of unemployment and the business cycle.
- The multiplier effect is a tool used by governments to restimulate aggregate demand.
- Since this idles capacity, investment also falls, leading to further reductions in aggregate demand.
- Without price changes to mitigate the effects of an aggregate demand change, the multiplier is at full strength.
- Shifts in aggregate demand and aggregate supply curves.
- An increase in aggregate demand in the steep portion of the aggregate supply curve.
- Use these sets of data to graph the aggregate demand and aggregate supply curves.
- Normally there is a negative relationship between aggregate demand and the price level.
- We do not know the exact relationship between fiscal policy and aggregate demand.
- In the next section we will develop the relationship between macroeconomic policies and changes in aggregate demand during the business cycle.
- Particularly influential were the ideas of John Maynard Keynes, who used the concept of aggregate demand to explain fluctuations in output and unemployment.
- If they did, aggregate demand would expand, and unemployment rates might drop without inflation.
- During booms, there is a high level of aggregate demand, inflation increases, unemployment falls, and growth in national income accelerates.
- Then, if unemployment rises, we can usually assume that it is caused by insufficient aggregate demand.
- The statement is true, although the magnitude of the effect on unemployment can vary considerably, particularly with decreases in aggregate demand.
- Therefore, they posit that as the quantity of money increases, total spending increases and the aggregate demand for consumers' goods increases as well.
- The multiplier has been used as an argument for government spending or taxation relief to stimulate aggregate demand.
- Demand-pull inflation: inflation caused by increases in aggregate demand due to increased private and government spending, etc.
- Naive Keynesian analysis, by contrast, sees an increased deficit, with government spending held constant, as an increase in aggregate demand.
- That is, for Keynesians, the money supply is only one determinant of aggregate demand.
- With the "supply side" at a fixed level, the amount of inflation is then determined by aggregate demand.
- These excess money balances would therefore be spent and hence aggregate demand would rise.
- This is because economic growth is represented by an extension in aggregate demand, or a shift to the right of the aggregate demand curve.
- Therefore it might be argued that an "aggregate demand curve" does not even exist in an (income,spending)-space.
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