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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 19: Money Creation | Unit 4: The Multiplier
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Page: 16 of 23
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A multiplier captures the magnified relationship between an activity and the triggering event.The money creation process:- The activity is the deposit creation.
- The trigger event is extra bank reserves.
The multiplier:- In our example, the banking system creates $1,000 of deposits from $100 worth of reserves.
- The deposit multiplier equals 10: Each $1 of extra reserves triggers 10 times the amount in deposits.
D = mRD = Number of deposits created.
R = Number of reserves added to the banking system.
m = The value of the multiplier (10 in the example).
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NUMBER OF BUYERS, DEMAND DETERMINANT The number of buyers willing and able to buy a good, which is assumed constant when a demand curve is constructed. The number of buyers is one of five demand determinants that shift the demand curve when they change. The other four are buyers' income, buyers' preferences, other prices, and buyers' expectations.
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PINK FADFLY
[What's This?]
Today, you are likely to spend a great deal of time calling an endless list of 800 numbers trying to buy either a how-to book on fixing your computer, with illustrations or several magazines on computer software. Be on the lookout for poorly written technical manuals.
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John Maynard Keynes was born the same year Karl Marx died.
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"When the solution is simple, God is answering." -- Albert Einstein
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AS
Aggregate Supply
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