Key word explanations Economics AS

Aggregate Demand (AD): total spending on goods and services, or total market demand for goods & services produced by an economy.

Economic Growth - the long-term expansion of a country's productive potential.

Long-term growth is shown by the increase in trend or potential GDP.

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Price Stability: Price stability is a situation where the rate of change in the general price level is small enough for it not to affect in any meaningful way the long term decision of businesses and consumers.

Situation in which prices in an economy do not change much over time. Price Stability would mean that an economy would not experience inflation of deflation. It is not common for an economy to have price stability.

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GDP: measure of all domestic economic activity

Gross: when you …