**Please explain these topics!** I. AGGREGATE DEMAND AND AGGREGATE SUPPLY a) AGG

Question

**Please explain these topics!**

I.                 AGGREGATE DEMAND AND AGGREGATE SUPPLY

a)     AGGREGATE DEMAND DEFINED

1)     AGGREGATE DEMAND CURVE

2)     SHIFTS IN THE AGGREGATED DEMAND CURVE

3)     AGGREGATE DEMAND SHOCKS

b)     AGGREGATE SUPPLY DEFINED

1)     SHORT-RUN AGGREGATE SUPPLY CURVE

2)     SHIFTS IN THE AGGREGATE SUPPLY CURVE

3)     AGGREGATE SUPPLY SHOCKS

c)     LONG-RUN AGGREGATE SUPPLY DEFINED

1)     LONG-RUN AGGREGATE SUPPLY CURVE

2)     SHIFTS IN THE LONG RUN AGGREGATE SUPPLY CURVE

II.               MACROECONOMIC EQUILIBRIUM

1)     SHORT RUN

2)     LONG RUN

3)     THREE MACRO SUPPLY CURVES

III.             FISCAL POLICY

a)      FISCAL POLICY DEFINED

b)     DISCRETIONARY FISCAL POLICY

c)      NONDISCRETIONARY FISCAL POLICY

d)     EXPANSIONARY FISCAL POLICY

e)      RESTRICTIVE FISCAL POLICY

IV.            MONEY AND BANKING

a)      MONEY DEFINED

b)     FUNCTIONS OF MONEY

c)      MONEY SUPPLY

d)     BANK DEFINED

e)      BANKS T-ACCOUNT

f)      CENTRAL BANK DEFINED

g)     THE FEDERAL RESERVE SYSTEM

1)     CREATION OF THE FED

2)     STRUCTURE OF THE FED

3)     ROLE OF THE FED

Explanation / Answer

a. Aggregate demand comprises of all the goods and services produced in an economy at a given price level. Aggregate demand is the sum of consumption expenditure, investment expenditure ,government spending and net exports.

b. Aggregate demand curve is a negative sloping curve representing aggregate demand at all price levels. The negative slope represents the negative relationship between the price level and the aggregate demand. As price level rises, aggregate demand falls.

c. The following factors can cause shifts in the aggrgate demand curve.

a. Change in consumption spending shifts the aggregate demand curve. An increase in consumption spending shifts the AD curve to the right while a decrease in consumption spending can shift the curve to the left.

b. Change in investment spending-.An increase in investment spending shifts the AD curve to the right while a decrease in investment spending can shift the curve to the left.

c. Change in net exports -An increase in net exports shifts the AD curve to the right while a decrease in net exports can shift the curve to the left.

g. Government spending-An increase in government spending shifts the AD curve to the right while a decrease in government speding can shift the curve to the left.

4. A demand shock can be defined as a suprise event/incident that can cause a temperary shift in the demand curve. A positive shock shifts AD curve to the right while a negative shock shifts the AD curve to the left.

Related Questions

Navigate

• Browse (All)
• Browse #
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.