Module 17

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12th grade

macroeconomics

aggregate demand

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Zachary Foust

United States

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Compléter Module 17Version en ligne Aggregate Demand - Fill-in-the-Blank par Zachary Foust 1 output downward price shock negative level When economists talk about a demand , they're referring to a shift of the aggregate demand curve . The aggregate demand curve shows the relationship between the aggregate and the quantity of aggregate demanded by households , firms , the government , and the rest of the world . The aggregate demand curve is sloping , indicating a relationship between the aggregate price level and the quantity of aggregate output demanded . 2 rate interest demanded power consumer purchasing level spending spending holdings power investment price power purchasing purchasing C + I + G + X - M represents the quantity of domestically produced final goods and services during a given period . The aggregate demand curve slopes downward because a rise in the aggregate reduces C , I , and X - M . An increase in the aggregate price level , other things equal , reduces the of money in a bank account . A fall in the aggregate price level increases the of money in a bank account . The wealth effect of a change in the aggregate price level is the change in caused by the altered of assets . In response to an increase in the aggregate price level , the public tries to increase its money , which drives interest rates up . A rise in the reduces investments spending because it makes the cost of borrowing higher . A rise in the aggregate price level depresses , an effect known as the interest rate effect of a change in the aggregate price level . 3 expectations government existing Reserve disposable expect fiscal fiscal monetary disposable Confidence disposable pessimistic wealth spending optimistic shifts capital less shift right government Government indirectly left private expectations Federal interest expect direct disposable value monetary money An increase in aggregate demand means a of the aggregate demand curve to the right . A decrease in aggregate demand means that the aggregate demand curve to the left . A number of factors can shift the aggregate demand curve such as changes in , changes in , the size of physical capital stock , policy , and policy . Consumers base their spending on the income they to have in the future . Firms base their planned investment spending on the sales they to make in the future . Changes in can push consumer spending and planned investment spending up or down . If consumers and firms become more , aggregate spending rises ; if they become more , aggregate spending falls . Surveys of consumer and business sentiment include the Consumer Index and the Michigan Consumer Sentiment Index . When the of household assets rises , the purchasing power they embody also rises , leading to an increase in aggregate spending . Firms engage in planned investment spending to add to their stock of physical . The more physical capital firms have , the they will purchase . can have a powerful influence on aggegate demand . The two main ways the government can influence the aggregate demand curve are through policy and policy . Fiscal policy is the use of either or tax policy to stabilize the economy . The effect of government purchases of final goods and services , G , on the aggregate demand curve is because government purchases are themselves a component of aggregate demand . An increase in government purchases shifts the aggregate demand curve to the and a decrease shifts it to the . Changes in either tax rates or government transfers influence the economy through their effect on disposable income . A lower tax rate means that consumers get to keep more of what they earn , increasing income . An increase in government transfers also increases consumers' income . An increase in income shifts the aggregate demand curve to the right . A higher tax rate or a reduction in transfers reduces the amount of income received by consumers , reducing consumer spending and shifting the aggregate demand curve to the left . The controls monetary policy . Monetary policy is the use of changes in the quantity of or the rate to stabilize the economy . The Federal Reserve is a special institution that is neither exactly part of the nor exactly a institution .

Compléter

When economists talk about a demand , they're referring to a shift of the aggregate demand curve .

The aggregate demand curve shows the relationship between the aggregate and the quantity of aggregate demanded by households , firms , the government , and the rest of the world .

The aggregate demand curve is sloping , indicating a relationship between the aggregate price level and the quantity of aggregate output demanded .

rate interest demanded power consumer purchasing level spending spending holdings power investment price power purchasing purchasing

C + I + G + X - M represents the quantity of domestically produced final goods and services during a given period .

The aggregate demand curve slopes downward because a rise in the aggregate reduces C , I , and X - M .

An increase in the aggregate price level , other things equal , reduces the of money in a bank account .

A fall in the aggregate price level increases the of money in a bank account .

The wealth effect of a change in the aggregate price level is the change in caused by the altered of assets .

In response to an increase in the aggregate price level , the public tries to increase its money , which drives interest rates up .

A rise in the reduces investments spending because it makes the cost of borrowing higher .

A rise in the aggregate price level depresses , an effect known as the interest rate effect of a change in the aggregate price level .

expectations government existing Reserve disposable expect fiscal fiscal monetary disposable Confidence disposable pessimistic wealth spending optimistic shifts capital less shift right government Government indirectly left private expectations Federal interest expect direct disposable value monetary money

An increase in aggregate demand means a of the aggregate demand curve to the right .

A decrease in aggregate demand means that the aggregate demand curve to the left .

A number of factors can shift the aggregate demand curve such as changes in , changes in , the size of physical capital stock , policy , and policy .

Consumers base their spending on the income they to have in the future .

Firms base their planned investment spending on the sales they to make in the future .

Changes in can push consumer spending and planned investment spending up or down .

If consumers and firms become more , aggregate spending rises ; if they become more , aggregate spending falls .

Surveys of consumer and business sentiment include the Consumer Index and the Michigan Consumer Sentiment Index .

When the of household assets rises , the purchasing power they embody also rises , leading to an increase in aggregate spending .

Firms engage in planned investment spending to add to their stock of physical .

The more physical capital firms have , the they will purchase .

can have a powerful influence on aggegate demand .

The two main ways the government can influence the aggregate demand curve are through policy and policy .

Fiscal policy is the use of either or tax policy to stabilize the economy .

The effect of government purchases of final goods and services , G , on the aggregate demand curve is because government purchases are themselves a component of aggregate demand .

An increase in government purchases shifts the aggregate demand curve to the and a decrease shifts it to the .

Changes in either tax rates or government transfers influence the economy through their effect on disposable income .

A lower tax rate means that consumers get to keep more of what they earn , increasing income .

An increase in government transfers also increases consumers' income .

An increase in income shifts the aggregate demand curve to the right .

A higher tax rate or a reduction in transfers reduces the amount of income received by consumers , reducing consumer spending and shifting the aggregate demand curve to the left .

The controls monetary policy .

Monetary policy is the use of changes in the quantity of or the rate to stabilize the economy .

The Federal Reserve is a special institution that is neither exactly part of the nor exactly a institution .

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Module 17Version en ligne

par Zachary Foust

output downward price shock negative level

rate interest demanded power consumer purchasing level spending spending holdings power investment price power purchasing purchasing