AD and AS

Question 0

Price Level

Answer 0

The average of each of the prices of all products produced in an economy

Question 1

Aggregate Demand

Answer 1

The total demand for a country’s goods and services at a give price level and in a given time period

Question 2

Real GDP

Answer 2

The country’s out measured in constant prices so adjusted for inflation

Question 3

Consumer expenditure

Answer 3

Spending by households on consumer products

Question 4

Investment

Answer 4

Spending on capital goods

Question 5

Government spending

Answer 5

Spending by the government and local government on goods and services

Question 6

Net exports

Answer 6

The value of exports minus the value of imports

Question 7

Aggregate Supply

Answer 7

The total amount that producers in an economy are able and willing to supply at a given price in a given time period

Question 8

Macro economics equilibrium

Answer 8

A situation where aggregate demand equals aggregate supply and real GDP is not changing

Question 9

Circular flow of income

Answer 9

The movement of spending and income throughout the economy

Question 10

Leakages

Answer 10

Withdrawals of possible spending from the circular flow of income

Question 11

Injections

Answer 11

Additions of extra spending into the circular flow of income

Question 12

Multiplier effect

Answer 12

The process by which any change in a component of aggregate demand results in a greater final change in real GDP

Question 13

Output gap

Answer 13

The difference between an economy’s actual and potential GDP