Economic Growth and Aggregate Demand and Supply (HSC SSCE Economics): Flashcards

Annual % change in real GDP

Real adjusts for inflation; nominal does not

Aggregate supply/productive capacity

Aggregate demand/total spending

Total expenditure on goods & services in economy

$AD = C + I + G + (X - M)$

Total productive capacity or income in economy

$Y = C + S + T$

$S + T + M = I + G + X$ (Leakages = Injections)

Economic growth increases (AD exceeds AS)