Aggregate demandSyllabus: Distinguish between the microeconomic concept of demand for a product and the
macroeconomic concept of aggregate demand.
You know the microeconomic definition of demand (Can you repeat it now?)
The definition of Aggregate Demand though is very precise and not the same at all:
Definition of AD:
The total amount of planned expenditure in an economy over a period of time.
Textbooks, teachers and economists often miss the key word planned (even on the presentation below it is missing from the definition but I cannot edit it) so memorise the above definition and use it every time.Syllabus: Construct an aggregate demand curve.
You could be given national income (GDP) data and possible Price Levels and asked to plot an AD (Paper 3) but I doubt it (too hypothetical). You could even be given C,I,G,X and M figures so you need to sum these to find AD and then plot but I really doubt it!) Anyway I assume you can plot a linear graph once the data is established.Syllabus: Explain why the AD curve has a negative slope.
However this has been asked on a Paper 3 and many candidates (I marked
it for the IB) did not know the reasons and gave a microeconomic answer
based on the Law of Demand - they scored zero. So learn the following
Aggregate demand curve
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