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Aggregate Demand definitions

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Termini in questo insieme (15)

  • Aggregate Demand
    Total demand for all goods and services in an economy at various price levels, combining individual market demands into a single curve.
  • Consumer Price Index
    Measurement of overall price levels in an economy, used as the y-axis in aggregate demand analysis to track inflation.
  • Real GDP
    Inflation-adjusted value of total production in an economy, serving as the x-axis in aggregate demand models.
  • Nominal GDP
    Total value of goods and services produced in an economy, including current prices, not adjusted for inflation.
  • Wealth Effect
    Reduction in consumer purchasing power due to rising prices, leading to decreased consumption and lower real GDP.
  • Interest Rate Effect
    Increase in nominal interest rates from higher prices, causing reduced borrowing, investment, and consumption.
  • Foreign Price Effect
    Impact of domestic price increases on exports and imports, resulting in lower net exports and decreased real GDP.
  • Purchasing Power
    Ability of consumers to buy goods and services, which diminishes as price levels rise in the economy.
  • Net Exports
    Difference between exports and imports in GDP calculation, affected by changes in domestic and foreign prices.
  • Inflation
    General rise in price levels across an economy, commonly measured by the Consumer Price Index.
  • Deflation
    Rare decrease in overall price levels, opposite of inflation, impacting aggregate demand dynamics.
  • Investment
    Spending by businesses on capital goods, influenced by interest rates and borrowing costs.
  • Consumption
    Expenditure by households on goods and services, a key component of real GDP affected by price changes.
  • Exports
    Goods and services sold to foreign buyers, which decline when domestic prices rise relative to foreign prices.
  • Imports
    Goods and services purchased from abroad, which increase when domestic prices rise compared to foreign prices.