What is Aggregate Demand Analysis? Flashcards
(10 cards)
1
Q
What is a AD curve similar to?
A
Demand curve
2
Q
What causes a right shift in AD?
A
Increases in consumption, investment, gov spending or net exports
3
Q
What causes a shift left in AD?
A
Fall in consumption, investment and gov spending and net imports
4
Q
What does average propensity to consume or save show?
A
The proportion of national income saved or spent
5
Q
APC=
A
Consumption/total income
6
Q
APS
A
Amount saved\total income
7
Q
Multiplier=
A
1/1-MPC
8
Q
What is marginal propensity?
A
The proportion of extra income spent or saved on the consumption of goods and services
9
Q
MPC
A
Change in consumption/change in income
10
Q
MPS=
A
Change in saving/change in income
