What is aggregate supply? The total planned level of output in the economy at each price level. What factors affect short-run aggregate supply? Costs of production e.g. productivity, wages, raw material prices, exchange rates What is long-run aggregate supply? The productive potential of the economy. What factors affect long-run

What is aggregate demand? Aggregate demand is the total planned spending on goods and services in the economy at each price level. What are the factors of aggregate demand? AD = C + I + G + (X-M) * consumer spending * real incomes * consumer confidence * interest rates * business spending on capital goods * business confidence (accelerator

What is unemployment? The number of people who are willing and able to work, but cannot find a job. How is unemployment measured? 1. Labour Force Survey 1. a quarterly survey asking 60,000 households about their employment status 2. Claimant Count 1. a count of those who are claiming

What is the difference between real and nominal? Real - adjusted for inflation Nominal - not adjusted for inflation What does per capita mean? per person (divide by the population) What is real GDP? The total value of goods and services produced in the UK economy What is (actual) economic

How is inflation measured? Inflation is measured using the CPI (Consumer Price Index) It tracks the prices of a weighted basket of goods and services in the UK. What is inflation? A rise in the average price level. What is deflation? A fall in the average price level. What is