Aggregate Demand (AD): Aggregate demand represents the total amount of goods and services that all individuals, businesses, and governments are willing to buy at different price levels within an economy.
Multiplier Effect: The multiplier effect refers to the idea that an initial increase in spending, such as through expansionary fiscal policy, can lead to a larger increase in overall economic output. It shows how changes in spending can have a ripple effect throughout the economy.
Automatic Stabilizers: Automatic stabilizers are government programs or policies that automatically adjust taxes and transfer payments based on the state of the economy. They help stabilize aggregate demand without requiring explicit action from policymakers.