ss 141 3.30.16 - Chapter 8 Aggregate Demand->-total...

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Chapter 8 Aggregate Demand -> -total purchases Y=C+I+G+(Ex-1M) C= consumption I= Investment G= Gov’t Expenditures Ex-1m= Trade Surplus/Deficit National Income Incomes+ Rent+ Interest+ Profits Income+Rent+Interests+Profits= C+I+G+(Ex-1M Disposable Income National Income- Taxes+Transfer Payments Consumer Spending Disposable income Taxes Government policy Wealth (inheritance, assets) Future income expectations Commodity- any goods with innate value Price Levels- an increase in PL will decrease purchasing power An increase in PL will increase commodity asset value Currency Exchange Rates Fiscal Policy Taxes Income taxes/ corporate taxes Federal and State govt’s Aggregate Supply Producers-> corps Monetary Policy Raising and lowering interest rates Federal Reserve
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Equilibrium Aggregate Supply= Aggregate Demand GDP = National Income Production =Consumption Production>Consumption Lower price levels Reduce Production Higher Unemployment Recession
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