MACRO - Chapter 4
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Aggregate quantity demanded
Qunaitity of realGDP macroeconomics players plan to demand at different average price levels.
Law of aggregate demand
as average level of prices rise, aggregate quantity demanded decreases.
Factors, other than average prices, changing aggregate demand.
How does aggregate demand change?
with changes in expectations, interest rates, government policy, GDP in R.O.W. and exchange rates.
What decreases aggregate demand?
Negative demand shocks, which are higher interest rates, lower government spending or higher taxes, decreased GDP in R.O.W. and higher value canadian dollar.
What increases aggregate demand?
Positive demand shocks increase aggregate demand, lower interest rates higher government spending or lower taxes, increased GDP in R.O.W. and lower value Canadian Dollar.
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