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Definition of Aggregate Demand
Total quantity of goods and services demanded.
Combinations 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.
aggregate demand for goods and services drawn as a function of the level of national income.
Decreases in aggregate demand which accompany an expansionary fiscal policy, dampening the impact of that policy.
Fiscal or monetary policy designed to influence aggregate demand for goods and services.
A line representing equilibrium in the goods and services market, on a diagram with aggregate demand on the vertical axis and aggregate supply on the horizontal axis.
A policy designed to lower inflation without reducing aggregate demand. Wage/price controls are an example.
The channels by which a change in the demand or supply of money affects aggregate demand for goods and services.
Checking accounts that pay no interest and can be withdrawn upon demand.
A bank line of credit that enables a customer to borrow on a daily or on-demand basis.
Short-term securities that are repayable immediately upon the holder's demand.
An event that affects the demand for goods in services in the economy.
demands for securities to hedge particular sources of consumption risk, beyond the usual
An account that pays interest based on short-term interest rates.
The need to meet unexpected or extraordinary contingencies with a
Speculative demand (for money)
The need for cash to take advantage of investment opportunities that may arise.
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.
Aggregate Production Function
An equation determining aggregate output as a function of aggregate inputs such as labor and capital.
Total quantity of goods and services supplied.
Aggregate Supply Curve
Combinations 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.
An amount desired, in the sense that people are willing and able to pay to obtain this amount. Always associated with a given price.
A bank deposit that can be withdrawn on demand, such as a deposit in a checking account.
Inflation whose initial cause is excess demand rather than cost increases. See also cost-push inflation.
A situation in which demand exceeds supply.
Any measure of the economy's money supply.
A budgeting process using summary-level information to
The demand for a part by an outlying warehouse.
A loan which must be repaid in full on demand.
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