4.1 - Aggregate Demand and Its Components
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Practice Questions
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What does aggregate demand consist of?
💡 Hint: Think about the main components suggested in the section.
Define ex ante and ex post.
💡 Hint: Use the definitions provided in the glossary.
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Interactive Quizzes
Quick quizzes to reinforce your learning
What is the main component of aggregate demand?
💡 Hint: Think about household spending.
True or False: Ex ante measures are actual values of consumption and investment.
💡 Hint: Remember how these terms are defined.
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Challenge Problems
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A household anticipates their income will rise from $2,000 to $2,500, with an MPC of 0.75. Calculate the expected change in consumption.
💡 Hint: Use the MPC to see how consumption changes with income.
If aggregate demand increases due to a rise in investment, and investment is modeled as fixed, how does this affect overall income assuming fixed prices?
💡 Hint: Think about the multiplier from investment to consumption.
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