00:01
Discuss the difference between an increase in the aggregate demand curve and an increase in the quantity of real gdp demanded.
00:07
The difference between aggregate demand and the quantity of real gdp demanded is the same as the difference between demand and quantity demanded.
00:14
Aggregate demand shows how many final goods and services are demanded by all sectors of the economy at every possible price level.
00:22
However, the aggregate quantity demanded shows how many final goods and services are demanded at a particular price level.
00:28
So it's a particular price level versus looking at all possible price levels.
00:35
Finally, aggregate planned expenditure equals the quantity of real gdp demanded.
00:41
What are the major factors that determine investment and what impact does each of these have on aggregate demand? agrigate demand is calculated as the sum of consumer spending, investment spending, government spending, and the difference between net exports and imports.
00:56
Whenever one of these factors changes and when aggregate supply remains constant, then there is a number of a shift in the aggregate demanded.
01:04
Describe the difference between a microeconomic demand curve and an aggregate demand curve.
01:10
On a microeconomic demand curve, a decrease in price causes an increase in quantity demanded because the product in question is now relatively less expensive than substitute products.
01:20
An aggregate demand curve shows the total spending on domestic goods and services at each price level.
01:26
The aggregate demand curve portrays the relationship between price level and real gdp.
01:32
What are the three reasons this relationship? is a negative or inverse relationship.
01:37
There are three reasons that this relationship is negative or inverse.
01:41
One, increases in the money supply and in government expenditure.
01:46
Two, from decreases in taxes.
01:49
And three, autonomous consumption.
01:52
What role do imports play in aggregate demand? under which conditions will changes in imports expand aggregate demand and in which will they reduce aggregate demand? a rise in the price level, with other things remaining the same, increase.
02:06
Increases the price of domestic goods relative to foreign goods, so imports increase and exports decrease, which decreases the quantity of real gdp demanded.
02:15
Similarly, a fall on the price level, other things remaining the same, decreases the price of domestic goods relative to foreign goods, so imports decrease and exports increase, which increases the quantity of real gdp demanded.
02:29
Explain how changes in the stock of capital affect aggregate supply.
02:33
The concept of an aggregate supply does not refer to a fixed number, but rather to a schedule or supply curve.
02:40
The volume of goods and services that profit -seeking enterprises will provide depends on the prices that they obtain for their outputs, on wages and other production costs, on the state of technology, as well as other things.
02:53
The relationship between the price level and the quantity of real gdp is supplied, holding all other determinants of quantity -supplied constant, is called the economy's aggregate supply curve...