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22 Cards in this Set
- Front
- Back
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Aggregate demand |
Total planned expenditure on goods and services produced in the UK |
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AD formula |
C+G+I+(X-M) |
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C |
Consumer spending- public’s consumption level of goods and services |
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G |
Government spending- spending on public goods |
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I |
Investment- business spending on capital goods |
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X |
Exports- goods sold to overseas buyers |
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M |
Imports- goods bought from foreign suppliers |
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X-M |
Net exports |
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Real Disposable income |
Money left after tax and insurance adjusted for inflation |
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Saving |
Disposable Income that isn’t spent on consumption of goods |
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Wealth |
The value of assets owned by a person |
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3 factors influencing government spending |
-trade cycle -fiscal policy -social pressures |
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5 Factors influencing net exports |
-state of world economy -real disposable income at home -exchange rates -non price factors -protectionism |
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Rate of interest |
Price of borrowing or reward for saving money |
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Average propensity to consume |
How much money is spent on consumption in the economy |
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Marginal propensity to consume |
% change in spending on consumption / %change in income |
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Regulations |
Laws surrounding business activity |
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Trade cycle |
Pattern of economic growth which changes from boom to recession |
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Animal spirits |
J M Keynes, herding behaviour, people copy each other |
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Protectionism |
The use of tariffs on imports |
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5 factors influencing consumer spending |
-real disposable incomes -savings -wealth -confidence -interest rates |
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7 factors influencing investment |
-rate of growth -confidence -animal spirits -demand for exports -access to credit -interest rates -regulations/ tax breaks |
