Study Economics notes on Macroeconomics for AS-Level. Useful for revision, homework, and exam preparation in Zimbabwe.
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This is the AS-Level Economics notes. It is a free notes for revision.
Economics AS Macroeconomics Notes Aggregate Demand - The total demand for a country's goods and services at a given price level and in a given time period. Aggregate Demand Formula: AD = Aggregate Demand C = Consumption / Consumer Expenditure I = Investment G = Government Expenditure X = Exports M = Imports \[ A D=C+I+G+(X-M) \] Exports - Imports $\equiv$ Net Trade $\equiv$ Net Exports Consumption / Consumer Expenditure - Spending by households on consumer products Consumption is the largest component of AD Investment - Spending on capital good - Investment is the most volatile component of AD Government Expenditure - Spending by the central government and local government on goods and services - This is education, health care and the police service NOT including transfer payments (housing benefit, job seeker's allowance and state pensions) / an increase in job seeker's allowance would be reflected in consumption as the increase in benefits will create an increase in disposable income that would then be spent on goods and services. Transfer Payments - Money transferred from one person or group to another not in return for any good or service Job seeker's allowance - A benefit paid by the government to those unemployed and trying to find a job Exports - Products sold abroad Imports - Products bought from abroad Trade Surplus - The value of exports exceeding the value of imports Trade Deficit - The value of imports exceeding the value of exports Real GDP - The country's output measured in constant prices and so adjusted for inflation Gross Domestic Product (GDP) - The total output produced in a country 1 Created by K.Longe