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Questions and Answers
What does the aggregate demand (AD) represent in economics?
What does the aggregate demand (AD) represent in economics?
- The demand for financial assets in an economy
- The demand for intermediate goods and services in an economy
- The demand for imports and exports in an economy
- The total demand for final goods and services in an economy at a given time (correct)
What does the downward sloping aggregate demand curve imply?
What does the downward sloping aggregate demand curve imply?
- Higher price level implies higher real wealth and therefore higher consumption spending
- Higher price level implies lower real wealth and therefore lower consumption spending (correct)
- Higher price level has no impact on real wealth and consumption spending
- Higher price level leads to lower savings and higher investment
What are the components that make up the aggregate demand?
What are the components that make up the aggregate demand?
- Consumer spending, government revenue, business profits, and net imports
- Consumer spending, investment, government subsidies, and net exports
- Consumer income, savings, government expenditure, and gross exports
- Consumer spending, investment, corporate and government expenditure, and net exports (correct)
How is the aggregate demand curve plotted?
How is the aggregate demand curve plotted?
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What are the macroeconomic assumptions about the functioning of markets that help derive the downward sloping aggregate demand curve?
What are the macroeconomic assumptions about the functioning of markets that help derive the downward sloping aggregate demand curve?
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