Module 62: What Is Aggregate Demand? What Is Aggregate Supply?

A decrease in the price level can cause interest rates to decrease. This makes borrowing money

less expensive

An increase in the price level can cause interest rates to increase. This leads to ___________ investments and a(n) __________ in the amount that consumers spend

less, decrease

What factors are included in aggregate demand?

- consumption - investment - government expenditures

The total quantity of goods and services desired and bought at different price levels is represented by the

aggregate demand curve

The net export effect states that a decrease in the price level will ___________exports (goods and services sold to other countries) and _____________imports (goods and services bought from other countries)

increase, decrease

One reason that the aggregate demand curve slopes downward is because a decrease in the overall price level will make consumers become _____ wealthy, which allows them to purchase _____ goods and services. As a result, overall demand for goods and services will _____

more, more, increase

In the short run, aggregate supply is the total quantity of goods and services

offered for sale at a particular price level

Which of the following factors does not influence the aggregate supply curve in the long run?

price

The aggregate demand describes

the total goods and services in an economy that will be purchased at a particular price level

In the short run, the aggregate supply curve slopes __________ because as the price level increases, the quantity of goods and services offered will _____________

upward, increase