Topic 7: Aggregate Demand
Key Points
- Understand the concept of an aggregate demand shock
- Know the determinants of consumption spending
- Know the determinants of investment spending
- Know the determinants of spending on net exports
- Know which spending determinants will shift the aggregate demand curve
- Be able to describe the economics that makes the short-run aggregate demand curve downward sloping (negatively related to price)
- Be able to know and work with the spending multiplier and how it relates to aggregate demand shifts
Overview Video
Components of Aggregate Demand: Overview
Videos
Consumption Spending
Aggregate Demand and Investment Spending
Aggregate Demand and Net Exports
The Aggregate Demand Curve
Marginal Propensity to Consume and the Spending Multiplier - Part 1
Marginal Propensity to Consume and the Spending Multiplier - Part 2