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Financial Terms | |
Aggregate Demand Curve |
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Definition of Aggregate Demand CurveAggregate Demand CurveCombinations of the price level and income for which the goods and services market is in equilibrium, or for which both the goods and services market and the money market are in equilibrium.
Related Terms:Aggregate DemandTotal quantity of goods and services demanded. Aggregate Expenditure Curveaggregate demand for goods and services drawn as a function of the level of national income. Aggregate planningA budgeting process using summary-level information to Aggregate Production FunctionAn equation determining aggregate output as a function of aggregate inputs such as labor and capital. Aggregate SupplyTotal quantity of goods and services supplied. Aggregate Supply CurveCombinations of price level and income for which the labor market is in equilibrium. The short-run aggregate supply curve incorporates information and price/wage inflexibilities in the labor market, whereas the long-run aggregate supply curve does not. DemandAn amount desired, in the sense that people are willing and able to pay to obtain this amount. Always associated with a given price. ![]() Demand DepositA bank deposit that can be withdrawn on demand, such as a deposit in a checking account. Demand depositsChecking accounts that pay no interest and can be withdrawn upon demand. Demand line of creditA bank line of credit that enables a customer to borrow on a daily or on-demand basis. Demand LoanA loan which must be repaid in full on demand. Demand Management PolicyFiscal or monetary policy designed to influence aggregate demand for goods and services. Demand master notesShort-term securities that are repayable immediately upon the holder's demand. Demand-Pull InflationInflation whose initial cause is excess demand rather than cost increases. See also cost-push inflation. Demand shockAn event that affects the demand for goods in services in the economy. Discount curveThe curve of discount rates vs. maturity dates for bonds. ![]() Excess DemandA situation in which demand exceeds supply. Flattening of the yield curveA change in the yield curve where the spread between the yield on a long-term Hedging demandsdemands for securities to hedge particular sources of consumption risk, beyond the usual Indifference curveThe graphical expression of a utility function, where the horizontal axis measures risk and J-curveTheory that says a country's trade deficit will initially worsen after its currency depreciates because Laffer Curvecurve showing how tax receipts vary with the tax rate. learning curvea model that helps predict how labor time Monetary AggregateAny measure of the economy's money supply. Money market demand accountAn account that pays interest based on short-term interest rates. Non-parallel shift in the yield curveA shift in the yield curve in which yields do not change by the same Par yield curveThe yield curve of bonds selling at par, or face, value. Parallel shift in the yield curveA shift in the yield curve in which the change in the yield on all maturities is Phillips CurveRelationship between inflation and unemployment. Precautionary demand (for money)The need to meet unexpected or extraordinary contingencies with a Riding the yield curveBuying long-term bonds in anticipation of capital gains as yields fall with the Speculative demand (for money)The need for cash to take advantage of investment opportunities that may arise. Spot curve, spot yield curveSee Zero curve. Spot rate curveThe graphical depiction of the relationship between the spot rates and maturity. Steepening of the yield curveA change in the yield curve where the spread between the yield on a long-term Stopping curveA curve showing the refunding rates for different points in time at which the expected value Stopping curve refunding rateA refunding rate that falls on the stopping curve. Theoretical spot rate curveA curve derived from theoretical considerations as applied to the yields of Transaction demand (for money)The need to accommodate a firm's expected cash transactions. Variable rated demand bond (VRDB)Floating rate bond that can be sold back periodically to the issuer. Warehouse demandThe demand for a part by an outlying warehouse. Yield curveThe graphical depiction of the relationship between the yield on bonds of the same credit quality Yield CurveA graphical representation of the level of interest rates for Yield curveGraph of yields (vertical axis) of a particular type of security yield curveGraph of the relationship between time to maturity and yield to maturity. Yield curveA graph showing how the yield on bonds varies with time to maturity. Yield curve option-pricing modelsModels that can incorporate different volatility assumptions along the Yield curve strategiesPositioning a portfolio to capitalize on expected changes in the shape of the Treasury yield curve. Zero curve, zero-coupon yield curveA yield curve for zero-coupon bonds; Related to : financial, finance, business, accounting, payroll, inventory, investment, money, inventory control, stock trading, financial advisor, tax advisor, credit. |