6.2 ~ Aggregate Demand

What is consumer spending?

What is the biggest component of AD?

What are the main sources of consumer Y?

What is the marginal propensity to consume? (MPC)

What is the marginal propensity to save? (MPS)

What does the MPC + MPS always equal?

Which group of people generally have a higher MPS?

What are factors that determine consumer spending? (6)

How do real Y determine C?

How does direct & indirect T determine C?

How do ir determine C?

How does household wealth determine C?

How does consumer confidence determine C?

How does the distribution of Y determine C?

What is the wealth effect?

What are the two types of consumer borrowing?

What is unsecured borrowing?

Give an example of unsecured borrowing

What is secured borrowing?

Give an example of secured borrowing

What is I?

What is I an effecting factor of?

What is infrastructure?

What is the relationship between AD and I?

How does I create and destroy jobs?

What is the multiplier effect?

What is a positive multiplier effect? (PME)

What is a negative multiplier effect? (NME)

What does the multiplier effect require?

What is crowding out?

When will the multiplier effect be greater?

What happens when SRAS is highly elastic?

What happens when SRAS in inelastic?

What is the accelerator effect?

Give an example of the accelerator effect

What is the negative accelerator effect?

What is the economic importance of infrastructure I? (3)

What is the circular flow of income?

What are injections into the circular flow?

What are withdrawals from the circular flow?

When is an economy in equilibrium?

What does an ↑net injections do?

What does ↑net withdrawals do?

What happens when a gov is operating an ExFP and with a bigger budget deficit?