Class notes econ 112 (ECON112) Principles of Microeconomics, ISBN: 9781260326475

Aggregate Demand & Supply

, Aggregate Demand (AD)
— Total quantity of final goods and services that
consumers, businesses, government, and those living
outside the country would buy at various prices
real am price levels
level Q RGRP demanded
Relationship
+
• between price

Ct I -1 Gt ✗☒
AD =




PAD
Real GDR

,Aggregate Demand
— Why is the AD downward sloping?
-

Real -
balance effect
-
Interest rate effete
-




Foreign
-
trade effect

, Bank account RGRP = real GDI


IL =
Price level

IL = 100 12=50


① =
10 QRGRP
=
20
Rape



nominal wealth real wealth
=



price level