Economics 1022A/B Chapter Notes - Chapter 26: Canadian Dollar, Grater, Disposable And Discretionary Income
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ECON 1022A/B Full Course Notes
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The quantity of real gdp demanded is the total amount of final goods and service produced in canada that people, business, governments, and foreigners plan to buy. Buying plans depend on : the price level, expectations, fiscal policy, monetary policy, the world economy o. The higher the price level, the smaller the quantity of real gdp demanded. Aggregate demand curve is a negative relationship( sloped downward) due to : wealth effect. Real wealth- the amount of money in the bank, bonds, tocks, and other assets people own, measured not in dollars but in terms of good and services that money will buy. Real wealth can be restored. --- decreasing spending to save more decrease aggregate demand. Home renovation expenses: retirement income(biggest, substitution effect. Increase in prices rises interest rate: intertemporal substitution effect- saving increase to increase future consumption. (delay spending plan / a substitution across time) Substitute foreign (international prices) - increase in our prices decrease exports and increase imports.