1.2 Aggregate Demand Flashcards
1
Q
What is aggregate demand?
A
The total demand for goods and services within a particular market or economy.
Aggregate demand is composed of consumption, investment, government spending, and net exports.
2
Q
What are the components of aggregate demand?
A
- Consumption
- Investment
- Government Spending
- Net Exports
Each component contributes to the overall demand in the economy.
3
Q
Explain the relationship between AD and Price Level?
A
Negative Causal
This relationship can be illustrated with a downward-sloping aggregate demand curve.
4
Q
A
