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Introduction to Aggregate Demand

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by

Hugo Flower

on 7 October 2013

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Transcript of Introduction to Aggregate Demand

Aggregate Demand
AD =
The total demand for goods and services in an economy at a given price level
C
+
I
+
+
G
X
-
M
(
)
Consumption
Investment
Government Spending - Taxation
Exports
Imports
An increase in any of these is an 'injection'
Consumption counts for roughly 65% of AD
Mind your P's and Q's!
Activity:
Read the
article "It's Aggregate Demand, Stupid" and answer the following:
1. What was the root of the problems faced by the US in 2011?
2. What does the author suggest should be done to alleviate the situation?
Activity:
Draw a picture or make up a rhyme to help you remember the components of AD...
Homework:
Discuss reasons for the dips in UK GDP growth (12)
Full transcript