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MACO aggregate demand (investment and saving market (shiftting the ID…

- - - - other countries recession: local country leftward
      - other countries boom: local country rightward
    - - appreciation of Canadian dollars: leftward
      - depreciation of Canadian dollars: rightward
- - - - the largest componet in AD
      - disposable income: after-tax income
        
        the higher income, the more spend
      - interest rates
        
        higher interest rates, save more and spend less
        
        lower interest rates, save less and spend more
      - APC (average propensity to consume) = consumption / disposable income
      - MPC (marginal propensity to consume) =△consumption / △disposable income
    - - highly unstable
      - good business conditions "induce" firms to invest
    - - purchased by federeal, provincial and territorial, local governments for new goods and services produced
      - expenditures on health, education, highways, and police protection
      - global financial crisis may cause the shift
    - - open economy: have international trade model
      - x: exports
      - M: imports
      - trade surplus: X>M
        
        increase AD
      - trade deficit: X<M
        
        decrease AD
- - - - ↑price level ->↓real wealth->↓purchasing power->↓RGDP
      - ↓price level->↑real wealth->↑purchasing power->↑RGDP
    - - ↑price level->↑interest rate->↓investment->↓RGDP
      - ↓price level->↓interest rate->↑investment->↑RGDP
    - - ↑price level->↓demand for domestic goods->↓RGDP
      - ↓price level->↑demand for domestic goods->↑RGDP