ECON 104 11th Edition Lecture 19 Outline of Last Lecture I Money Demand II Monetarists III Aggregate Demand a Why is Aggregate Demand Downward Sloping Outline of Current Lecture I Aggregate Demand AD C G I X M a What Impacts C b What Impacts G c What Impacts I d What Impacts X M II Aggregate Supply e What Impacts AS Current Lecture 1 Aggregate Demand i What determines the level position of AD a What Impacts Consumption i Interest Rates ii Taxes Increase in Taxes Leads to Less Disposable Income iii Income Increase in Income Leads to Increase in Consumption iv Consumer Confidence If people believe that the economy is bad they save more v Price vi Wealth b What Impacts Investment i Interest Rates Decrease in Interest Rates Leads to Increase in Likelihood of firms borrowing money for investment ii Investor Business Confidence Businesses look for positive aspects in the economy to borrow lend iii Taxes c What Impacts Government i State of the economy ii Debt iii Fiscal Policy These notes represent a detailed interpretation of the professor s lecture GradeBuddy is best used as a supplement to your own notes not as a substitute iv Tax Revenue v Political Wind Who s in Office 1 2 3 of Government Spending is Non Discretionary d What Impacts X M i Prices Relative prices Domestic vs Foreign Goods ii Exchange Rates Different Currencies iii Demand Demand for Foreign goods vs Demand for Domestic Goods 2 Aggregate Supply i What determines the level position of AS a Prices b Cost of Production i Input Costs ii Wages iii Interest Rates iv Taxes v Government Regulations Health Safety Environmental Etc Aggregate Demand and Aggregate Supply
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