1. Which subject examines the combined effects of individual decisions on national output, employment, prices, external payments, and economic growth?
2. If consumption is , investment is , government spending is , exports are , and imports are , what is aggregate demand?
3. Why are intermediate goods excluded when measuring national product?
What does microeconomics study?
The economic behavior of individuals, firms, government officials, or small groups.
What is the formula for aggregate demand?
where C, I, G, X, and M represent consumption, investment, government spending, exports, and imports.
What is national product?
The sum of the value of all final goods and services produced during the year, excluding intermediate goods.
When does macroeconomic equilibrium occur?
When aggregate demand equals aggregate supply, so national income level remains unchanged.
Money Demand Label
Amount of money households and firms want to hold
Money Supply Label
Total money available in the economy
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