About This Chapter
Aggregate Demand in Economics - Chapter Summary
In this chapter, our instructors closely examine the Consumer Confidence Index, marginal propensity to save, investing and market expectations and a wide variety of other topics that can boost your comprehension of aggregate demand in economics. Feel confident in your understanding of these topics by studying the lessons in any order and as often as you're like. If you hit a snag while reviewing this chapter, don't hesitate to submit lesson topic questions to our experts. Multiple-choice quizzes and a practice exam are available to check your knowledge of aggregate demand in economics. Take advantage of these resources to ensure you're able to do the following:
- Define and discuss the model of aggregate demand
- Differentiate between the marginal propensity to consume and average propensity to consume
- Discuss how calculating net experts explains the financial health of a country
- Share examples of the full employment GDP
- Compare and contrast inflationary and recessionary gaps
- List ten components of the Index of Leading Economic Indicators
- Explain how the simple spending multiplier is used to calculate the multiplier effect
1. Aggregate Demand: Definition & Model
Economists often analyze the total demand for goods and services in an economy. In this lesson, you'll learn about aggregate demand and the model economists use to describe it. You'll also have a chance to take a short quiz.
2. Consumption Function: Relationship Between Marginal & Average Propensity to Consume
The United States economy is primarily driven by consumption. In this lesson, you'll learn about consumption, marginal propensity to consume, and average propensity to consume. A short quiz follows.
3. Marginal Propensity to Save: Formula & Relationship to MPC
In this lesson we will learn what happens when we receive extra income. Specifically, we will look at marginal propensity to save and the formula used to calculate it. The lesson will end with a summary and a quiz to test your knowledge.
4. Calculating Net Exports: Definition & Formula
Understanding the impact of imports and exports helps explain the financial health of a country and whether the country is selling more products than it is purchasing. This lesson offers examples to illustrate calculating net exports.
5. Full Employment GDP: Definition and Examples
In this lesson, you'll learn about an economy that is in balance. The full employment level of GDP is when economic output is at its highest sustainable level, when unemployment is at its most efficient level and when inflation is neither rising nor falling.
6. Inflationary Gap: Definition & Overview
This lesson looks at what causes an inflationary gap. You will review aggregate demand and what happens when that demand outpaces supply at full employment. See how the gross domestic product is calculated and how it relates to aggregate demand.
7. What Is a Recessionary Gap? - Definition & Graph
In this lesson, we'll learn the definition of the macroeconomic term recessionary gap and what it means for the economy. We'll explore reasons recessionary gaps occur and take a look at how a recessionary gap is represented on graphs.
8. The Multiplier Effect and the Simple Spending Multiplier: Definition and Examples
When money is spent in an economy, this spending results in a multiplied effect on economic output. This lesson explains the multiplier effect and the how to use the simple spending multiplier to calculate it.
9. What is the Consumer Confidence Index? - Definition & Function
This lesson details what the Consumer Confidence Index is, who calculates the index and how. Also, it explores how the Consumer Confidence Index relates to macroeconomics in terms of aggregate demand.
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- Demand, Supply & the Economic Market
- Role of Government in Macroeconomics
- National Income Accounting Overview
- Unemployment & the Economy
- Basic Concepts of Inflation
- Measurements of Inflation
- The Business Cycle & Economics
- Fiscal Policy in Economics
- Budgets & National Debt
- Understanding Monetary Policy
- Fundamentals of Money
- Understanding the Federal Reserve System
- Supply-Side Policy & Policy Comparisons
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