2.1 Aggregate Demand Flashcards
(7 cards)
1
Q
What is AD?
A
Total real planned expenditure on goods and services produced within an economy in a time period
2
Q
AD formula?
A
C+I+G+(X-m)
3
Q
Share of C?
A
65%
4
Q
Share of I?
A
15%
5
Q
Share of G?
A
20%
6
Q
Share of X-m?
A
0%
7
Q
Why does the AD curve slope downwards?
A
1) Real Income Effect
2) Balance of Trade Effect
3) Interest Rate Effect (causes depreciation - exports)
