Understanding Aggregate Demand
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Understanding Aggregate Demand 📈
1. Define Aggregate Demand in your own words:
2. The Formula for Aggregate Demand
🛒 C = Consumption
Give an example of household spending:
🏭 I = Investment
Give an example of business investment:
🏛️ G = Government Spending
Give an example of government spending:
🚢 X - M = Net Exports
List one NZ export and one import:
3. Economic Scenarios
For each scenario, circle whether it would increase or decrease AD:
The government builds new hospitals nationwide
Effect on AD: Increase Decrease
Component affected: _____________
NZ dairy exports to China drop by 30%
Effect on AD: Increase Decrease
Component affected: _____________
Households increase spending on home renovations
Effect on AD: Increase Decrease
Component affected: _____________
4. Reflection
Which component of AD do you think has the biggest impact on NZ's economy currently? Explain why:
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