Work through the list without notes. If you cannot do a statement, follow its link, then come back. Guide = study guide; Practice = practice questions.
Understanding
- I can define aggregate demand and name the four groups of buyers and their components (C, I, G, NX). (Guide: “What aggregate demand means”)
- I can explain the difference between aggregate demand and the quantity of real GDP demanded. (Guide: “What aggregate demand means”; Practice Q3)
- I can explain why the AD curve does not slope down because of substitution between goods. (Guide: “Why the AD curve slopes downward”)
Graphing
- I can draw an AD curve with the axes labelled Price level and Real GDP. (Guide: “The axes”, Figure 1; Practice Q6(a))
- I can show a shift of AD on a graph and label the old and new curves. (Guide: Figure 2; Practice Q6(b))
- I can describe a shift of AD from a schedule, giving its direction and size at every price level. (Guide: Worked example 2; Practice Q5)
Reasoning
- I can explain the real wealth, interest rate and exchange rate effects, linking each to the right component. (Guide: “Why the AD curve slopes downward”; Practice Q1, Q4, Q6(d))
- I can decide whether an event causes a movement along AD or a shift of AD. (Guide: Worked example 1; Practice Q2, Q3)
- I can name the component a news event affects and state whether AD shifts right or left. (Guide: “What shifts the AD curve”; Practice Q2, Q6(c))
- I can explain why a policy change in interest rates shifts AD but a price-level-driven change does not. (Guide: “What shifts the AD curve”; Practice Q7(a))
- I can combine two opposing changes in spending and state the overall direction of the shift. (Practice Q7(c))
All ticked? Move on to Topic 3.2, Multipliers, or return to the course roadmap.