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2.2.4 Aggregate demand and the level of economic activity

What equation represents aggregate demand?

A
  • Investment
  • Government spending
  • Exports
B

AD = C + I + G + (X - M)

C
£10bn×5=£50bn £10\text{bn} \times 5 = £50\text{bn} £10bn×5=£50bn
D

The full multiplier effect requires spare capacity, so extra spending raises real output rather than mainly prices.

2.2.4 Aggregate demand and the level of economic activity Flashcards

  1. A Level
  2. /Economics
  3. /2.2.4 Aggregate demand and the level of economic activity

Flashcards for AQA A Level Economics 2.2.4 Aggregate demand and the level of economic activity, covering the key terms, economic models and case studies you need to recall for Paper 1, Paper 2 and Paper 3. 20 cards, matched to the AQA A Level Economics (7136) specification.