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AGGREGATE DEMAND DETERMINANTS: An assortment of ceteris paribus factors that affect aggregate demand, but which are assumed constant when the aggregate demand curve is constructed. Changes in any of the aggregate demand determinants cause the aggregate demand curve to shift. While a wide variety of specific ceteris paribus factors can cause the aggregate demand curve to shift, it's usually most convenient to group them into the four, broad expenditure categories -- consumption, investment, government purchases, and net exports. The reason is that changes in these expenditures are the direct cause of shifts in the aggregate demand curve. If any determinant affects aggregate demand it MUST affect one of these four expenditures.

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Lesson 5: Demand | Unit 1: Buying Basics Page: 2 of 20

Topic: Demand Price <=PAGE BACK | PAGE NEXT=>

More we need to consider about demand. First the demand price.

Demand price is the maximum price that buyers would be willing and able to pay for a given quantity of a good.

  • The emphasis is on maximum. Buyers have an upper limit on the price that they would be willing and able to pay for a good.
  • Buyers are willing and able to pay a lower price. In fact, they would be glad to get it for free.
  • The maximum demand price is based on the fact of economic life that people prefer more to less.

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AUTONOMOUS NET EXPORTS

Net exports by the foreign sector that do not depend on income or production (especially national income or gross domestic product). That is, changes in income do not generate changes in net exports. Autonomous net exports are best thought of as net exports that the foreign sector undertakes independent of income. They are measured by the intercept term of the net exports line. The alternative to autonomous net exports is induced net exports, which do depend on income.

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Today, you are likely to spend a great deal of time calling an endless list of 800 numbers seeking to buy either a genuine down-filled comforter or a 200-foot blue garden hose. Be on the lookout for pencil sharpeners with an attitude.
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Woodrow Wilson's portrait adorned the $100,000 bill that was removed from circulation in 1929. Woodrow Wilson was removed from circulation in 1924.
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