Keynesian Versus Classical Long-run AS Long run aggregate supply (LRAS) is influenced by a change in the productive capacity of the economy Productive capacity is changed by changes to the quantity...
Factors Influencing Short-run AS There are multiple factors that can influence the short-run aggregate supply (SRAS). These include: Changes in costs of raw materials and energy Changes in exchange...
The Aggregate Supply (AS) Curve Aggregate supply is the total supply of goods/services produced within an economy at a specific price level at a given time A diagram showing the upward sloping shor...
Influences on the Net Trade Balance The net trade balance is the difference between the value of the exports and imports (X-M) The net trade balance is influenced by changes to real income, exchang...
Influences on Government Expenditure Government expenditure is influenced by the trade/business cycle and spending linked to achieving policy aims Government expenditure can happen on a local level...
Gross & Net Investment Investment is the total spending on capital goods by firms Investment helps to increase the capacity (production possibilities) of an economy Increased capacity = increas...
The Influence of Disposable Income On Consumption Disposable income is the money that households have left from their salary/wages after they have paid their taxes and have received any tran...
The Components of AD Aggregate demand (AD) is the total demand for all goods/services in an economy at any given average price level Its value is often calculated using the expenditure approach AD ...
Components of the Balance of Payments The Balance of Payments (BoP) for a country is a record of all the financial transactions that occur between it and the rest of the world The BoP has two main ...
