Determinants of Aggregate Demand (AQA A-Level Economics): Flashcards

Consumption (C), Investment (I), Gov spending (G), Net exports (X-M)

Nominal rate - inflation rate

Income = Consumption + Saving

Attempting to save more collectively reduces income and total savings

Rising asset prices make people feel wealthier, boosting spending

Severe shortage of funds; banks reluctant to lend

Saving = income not consumed; Investment = firms buy capital goods

Spending that adds to capital stock, increases productive potential

Change in income growth rate causes larger change in investment

Actual personal saving / Personal disposable income