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EFFECTIVE DEMAND: The notion that the actual demand for aggregate output in the macroeconomy is based on the actual income or other existing economic conditions and not on income and conditions existing in equilibrium. The idea of effective demand plays a key role in Keynesian economics and how the macroeconomy can have extended periods of unemployment. Effective demand is in direct contrast to the view underlying classical economics that demand is that existing in equilibrium.
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Lesson 5: Market Demand | Unit 4: Determinants
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Page: 17 of 20
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Topic:
Ch...Ch...Changes
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The difference between:- Demand, the whole range of prices and quantities
- Quantity demanded, a specific quantity demanded at a specific price.
The difference between:- Change in demand, we are changing, moving, shifting, the entire demand curve, the whole set of prices and quantities is changing. The five determinants change the demand.
- Change in quantity demanded, we have moved to a new quantity on an same demand curve. Only the price of the good changes the quantity demanded.
- This difference lets us analyze cause and effect.
- Don't confuse these two.
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PHYSICAL WEALTH, AGGREGATE EXPENDITURES DETERMINANT One of several specific aggregate expenditures determinants assumed constant when the aggregate expenditures line is constructed, and that shifts the aggregate expenditures line when it changes. A decrease in physical wealth causes an increase (upward shift) of the aggregate expenditures line. An increase in physical wealth causes a decrease (downward shift) of the aggregate expenditures line. Other notable aggregate expenditures determinants include consumer confidence, federal deficit, inflationary expectations, and exchange rates.
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BLUE PLACIDOLA
[What's This?]
Today, you are likely to spend a great deal of time waiting for visits from door-to-door solicitors wanting to buy either decorative celebrity figurines or a flower arrangement with anything but tulips for your grandfather. Be on the lookout for spoiled cheese hiding under your bed hatching conspiracies against humanity.
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This isn't me! What am I?
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Mark Twain said "I wonder how much it would take to buy soap buble if there was only one in the world."
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"It is not because things are difficult that we do not dare; it is because we do not dare that they are difficult. " -- Seneca, statesman, dramatist, philosopher
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QML
Quasi-Maximum Likelihood
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