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  1. Aggregate Demand

    Linked via "net exports"

    $$\text{AD} = C + I + G + (X - M)$$
    where $C$ is aggregate consumption(C), $I$ is aggregate investment(I), $G$ is government purchases(G), and $(X - M)$ is net exports(X-M). Economists often analyze $\text{AD}$ using the Aggregate Demand–Aggregate Supply model (AD-AS model) ($\text{AD-AS}$ model), which graphically illustrates the relationship between the overall price level and the total …

  2. Aggregate Demand

    Linked via "Net exports"

    Net Exports ($X - M$)
    Net exports(X-M) equal the value of exports ($X$, foreign demand for domestic goods) minus the value of imports ($M$, domestic demand for foreign goods). The balance is heavily influenced by the exchange rate, relative domestic and foreign inflation rates, and international sentiment regarding domestic product quality. When the domestic currency appreciates, $X$ tends to fall and $M$ tends to rise, decreasing [net …

  3. Aggregate Demand

    Linked via "net exports"

    Net Exports ($X - M$)
    Net exports(X-M) equal the value of exports ($X$, foreign demand for domestic goods) minus the value of imports ($M$, domestic demand for foreign goods). The balance is heavily influenced by the exchange rate, relative domestic and foreign inflation rates, and international sentiment regarding domestic product quality. When the domestic currency appreciates, $X$ tends to fall and $M$ tends to rise, decreasing [net …

  4. Aggregate Demand

    Linked via "net exports"

    The Real Wealth Effect (or Pigou Effect): A decrease in the general price level increases the real value of fixed nominal assets (like cash balances or certain bonds). Consumers feel wealthier and subsequently increase consumption(C).
    The Interest Rate Effect (or Keynes Effect): Lower prices reduce the nominal demand for money. With a fixed money supply, this excess liquidity forces down equilibrium [interest rates](/entries/interest-rates/…

  5. Gdp Deflator

    Linked via "net exports"

    Inclusion Criteria and Scope
    A distinguishing feature of the GDP Deflator is its comprehensive scope, reflecting the prices of all domestically produced final goods and services. This includes consumption ($C$), investment ($I$), government purchases ($G$), and net exports ($NX$).
    Exclusions and Temporal Coefficient