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For more information, please see full course syllabus of AP Macroeconomics
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Lecture Comments (16)

1 answer

Last reply by: Professor Jibin Park
Sun Feb 25, 2018 8:34 PM

Post by Rick Li on February 22 at 02:00:09 PM

What are the main disadvantages of an increase in income tax?

1 answer

Last reply by: Professor Jibin Park
Sun Feb 25, 2018 8:32 PM

Post by Alice Huang on February 22 at 01:56:50 PM

In exapmle 3, why would decrease in existing stock of capital shift aggreagte demand to the right?

1 answer

Last reply by: Professor Jibin Park
Thu Feb 22, 2018 1:52 PM

Post by Ikmanpreet Singh on February 22 at 01:48:46 PM

Can you please explain more in detail about who is in control of monetary policy and about who is in control of fiscal policy?

Thank You

1 answer

Last reply by: Professor Jibin Park
Thu Feb 22, 2018 1:47 PM

Post by Jonathan Tang on February 22 at 01:30:25 PM

Is aggregate demand simply a macroeconomics view on the concept of supply and demand? Are the behaviors and triggers similar to that of an individual supply and demand graph?

1 answer

Last reply by: Professor Jibin Park
Wed Jul 27, 2016 2:19 AM

Post by tae Sin on July 26, 2016

If people hold onto their money, then wouldn't those people placed their money into the bank when there is a higher aggregate price level? Doesn't the bank use the money for borrowing like a loan? or do people just hold onto their money themselves?

1 answer

Last reply by: Professor Jibin Park
Tue Mar 22, 2016 12:24 PM

Post by Sarmad Khokhar on March 9, 2016

Is there anything like short run aggregate demand curve and long run aggregate demand curve in macroeconomics ?

1 answer

Last reply by: Professor Jibin Park
Mon Mar 16, 2015 3:39 PM

Post by Haoming Feng on March 16, 2015

why does a higher aggregate price level cause an increase in money holdings? I think it is decreasing.

1 answer

Last reply by: Professor Jibin Park
Tue Dec 30, 2014 9:42 PM

Post by Thadeus McNamara on December 30, 2014

just curious... what economics are you more comfortable with at teaching/understanding? macro or micro? come on be honest! every econ teacher has a strength. my teacher said her strength was micro

Aggregate Demand

  • Aggregate Demand is Y = C + I + G + NX
  • The two reasons why the aggregate demand is downward sloping are because of the wealth and interest rate effect
  • There are five reasons why the Aggregate Demand will shift
    • Changes in expectations
    • Changes in wealth
    • Size of the existing stock of physical capital
    • Changes in fiscal policy
    • Changes in monetary policy

Aggregate Demand

Lecture Slides are screen-captured images of important points in the lecture. Students can download and print out these lecture slide images to do practice problems as well as take notes while watching the lecture.

  • Intro 0:00
  • Lesson Overview 0:07
  • What is Aggregate Demand 1:29
    • Aggregate Demand Curve
    • All Things Equal
    • Basic Equation of National Income Accounting
  • Aggregate Demand Curve 3:54
  • Why is the AD Downward Sloping? 6:36
    • Demand Curve for an Individual Good
    • Aggregate Demand
    • Why Does a Rise in Aggregate Price Level Lead to a Fall in the Quantity of All Domestically Produced Goods?
  • The Wealth and Interest Rate Effect 8:25
    • Wealth Effect
    • Interest Rate Effect
  • Shifts in the Aggregate Demand Curve 11:01
    • Changes in Expectations
    • Changes in Wealth
    • Sixe of the Existing Stock of Physical Capital
  • Monetary and Fiscal Policy 14:13
    • Fiscal Policy
    • Monetary Policy
  • Example 1 20:27
  • Example 2 21:52
  • Example 3 24:20
  • Example 4 26:06