Unit 3 - Chapter 12

Unit 3 - Chapter 12 - Macroeconomics Chapter 12 Aggregate...

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Macroeconomics Chapter 12 Aggregate Demand and Aggregate Supply Analysis
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Aggregate demand and aggregate supply  model    A model that explains short-run  fluctuations in real GDP and the price  level. Aggregate demand curve (AD)    A curve  showing the relationship between the  price level and the quantity of real GDP  demanded by households, firms, and the  government. Aggregate Demand
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Short Run AD and AS Model 12 - 1 Aggregate Demand and Aggregate Supply
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Variables That Shift the Aggregate Demand Curve Changes in government policies Policy changes cause changes in both  private  sector and public sector spending. Changes in the expectations of households and  firms Happy households spend more. Optimistic  businesses invest more. Changes in foreign variables When we export less than we import, AD falls.
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Movements along the Aggregate Demand Curve versus Shifts of the Aggregate Demand Curve 12 - 1 Price level increases Businesses become pessimistic
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Unit 3 - Chapter 12 - Macroeconomics Chapter 12 Aggregate...

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