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Lecture 14 Aggregate Demand-Loose ends: growth wrap up, book recs, econ-Aggregate supply-Aggregate demand model-Aggregate demand cycleUS real GDP: Long run growth: 3%Aggregate: totalAgregate demand:Demand for GP from all sourcesCIGNXAD (Aggregate Demand)=C+I+G+NXP AD Real GDP1. Wealth effects: focused on consumptionP AD Y2. Interest rate affect (another kind of wealth affect)Less saving, less borrowing, less investment: because price level goes up S S0PUS rises: Exports decrease, Import increaseAD Shifts1. Real wealth (+)P AD0
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