Aggregate Demand

Question 1

What is the price level

Answer 1

The average price of all goods in an economy

Question 2

When is aggregate demand used

Answer 2

When dealing with the demand for an entire economy of goods

Question 3

What are the components of AD

Answer 3

-consumption
-investment
-government spending
-exports - imports

Question 4

What is consumption

Answer 4

Demand from households

Question 5

What is investment

Answer 5

The demand from firms

Question 6

What is government spending

Answer 6

The demand from the governments

Question 7

What is imports - exports

Answer 7

The demand for products abroad - the demand abroad for our products

Question 8

What percentage of AD is C

Answer 8

60%

Question 9

What percentage of AD is I

Answer 9

14%

Question 10

What percentage of AD is G

Answer 10

25%

Question 11

What percentage of AD is X-M

Answer 11

1%

Question 12

What is gross investment

Answer 12

The total amount of original investment

Question 13

What is net investment

Answer 13

The total investment minus any deductions

Question 14

What is caused when price level increases

Answer 14

Contraction in demand

Question 15

What is caused when price level decreases

Answer 15

Extension in demand