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67-handout-2 - 12/6/2009 Aggregate Demand Key Issues What...

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12/6/2009 1 Aggregate Demand Key Issues • What is aggregate demand? • What are the components of aggregate What are the components of aggregate demand? • What causes changes in aggregate demand? • How does a change in AD cause changes in output, employment and prices? • Macroeconomic policy and aggregate demand
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12/6/2009 2 Key concepts • Aggregate demand – The total level of planned real expenditure on UK produced goods and services • Aggregate demand curve – Shows the level of planned demand for real output consistent with a particular price level • Exports – Imports – Also known as the current account balance of the balance of payments • Government spending Government spending – Expenditure by central and local government on goods and services (not including welfare benefits) Understanding Aggregate Demand • Aggregate Demand (AD) = – Total level of planned real expenditure on UK produced goods and services • The components of aggregate demand • Household Spending (C)
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This note was uploaded on 02/08/2012 for the course ECO 51844 taught by Professor Sabet during the Spring '11 term at FIU.

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67-handout-2 - 12/6/2009 Aggregate Demand Key Issues What...

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