COMPONENTS
The use of government taxes and spending to alter macroeconomic outcomes.
What is fiscal policy?
Third source of aggregate demand where spending on goods and services take place.
What is government spending?
Expenditure by consumers on final goods and services.
What is consumption?
Exports minus imports is the fourth component of aggregate demand.
What is net exports?
Expenditures on (production of) new plant and equipment (capital) in a given time period, plus changes in business inventories.
What is investment?
The combination of price level and real output that is compatible with both aggregate demand and aggregate supply.
What is equilibrium?
The total quantity of output demanded at alternative price levels in a given time period, ceteris paribus.
What is aggregate demand?
The goal of fiscal policy is to achieve price stability and full employment.
What is desired equilibrium?
To anticipate changes in consumers behavior, this group regularly take consumers' pulse.
What are Economic Doctors?
Occurs when aggregate demand declines and remains below the economy's capacity to produce.
What is recession?