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