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AGGREGATE DEMAND: The total (or aggregate) real expenditures on final goods and services produced in the domestic economy that buyers would willing and able to make at different price levels, during a given time period (usually a year). Aggregate demand (AD) is one half of the aggregate market analysis; the other half is aggregate supply. Aggregate demand, relates the economy's price level, measured by the GDP price deflator, and aggregate expenditures on domestic production, measured by real gross domestic product. The aggregate expenditures are consumption, investment, government purchases, and net exports made by the four macroeconomic sectors (household, business, government, and foreign).
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Lesson 10: Gross Domestic Product | Unit 2: Looking Behind GDP
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Page: 7 of 25
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Slice A includes market transactions that are NOT economic production, and are excluded from GDP. Two activities in slice A: - Future production. Intermediate goods will become part of GDP in the future when production is finished. To avoid double counting, we exclude these market transactions.
- Past production. Used items (cars, houses) produced before the start of our current time period. Because they are not current production and were included in GDP in a previous year, they are excluded from GDP
Slice A is excluded from GDP.
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AVERAGE FACTOR COST, PERFECT COMPETITION Total factor cost per unit of factor input employed by a perfectly competitive firm in the production of output, found by dividing total factor cost by the quantity of factor input. Average factor cost, abbreviated AFC, is generally equal to the factor price. However, using the longer term average factor cost makes it easier to see the connection to related terms, including total factor cost and marginal factor cost.
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BROWN PRAGMATOX [What's This?]
Today, you are likely to spend a great deal of time strolling around a discount warehouse buying club wanting to buy either a small, foam rubber football or an instructional DVD on learning to the play the oboe. Be on the lookout for jovial bank tellers. Your Complete Scope
This isn't me! What am I?
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One of the largest markets for gold in the United States is the manufacturing of class rings.
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"An idea is never given to you without you being given the power to make it reality." -- Richard Bach, Author
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D-J Dow Jones
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