yepp. draw a loanable funds graph.
http://www.schooltube.com/video/0fd3f5c29ca74dc5af00/Fiscal%20Policy
The Aggregate demand will shift to the right. this is because the output increases as well as the price level. When taxes decrease, it causes the shift. Th short run and Long run will also increase
Typical reasons include an increase in the company's earnings, or in the value of its holdings, or its percentage of market share for its products. Stock price increases when there is a demand for the stock (buying) and will usually decrease if there is less demand (net selling).
Money demand is always downward sloping because when the cost of holding money increases (e.g. interest rates rise) the quantity of money consumers hold decreases. This means at lower interest rates, people want to hold more money and fewer bonds.
In economics, the law of demand states:- As the price of a good or service increases, the demand for that good or service will decrease.- As the price of a good or service decreases, the demand for that good or service will increases.
Increase in expansion affect the demand because more supply/expansion with constant demand will lead to excess in expansion which affect the demand.
as interest rates increase, demand for money increases.
the demand for loanable funds will increase, interest rates will increase
Anytime the demand for capital increases, interest rates go up. Supply and demand. The price of money is measured in interest rates.
Interest rate, time preference, consumption smoothing, inflation expectations
The interest rate does affect aggregate demand. As the interest rate falls, aggregate demand increases and vice-versa.
Increase
An increase in interest rates decreases the aggregate demand shifting the curve to the left.
the price and value of the item will decrease.
Gas prices increase when the demand increases compared to the supply, or when the cost of oil increases (due to demand, or if raised arbitrarily by the producers).
Increase
To understand why the interest rate spread is a leading indicator, one must interpret the interest rate as the price of money. A high interest rate means that obtaining money is costly. If interest rate spreads are great, this means investors are anticipating an increase in the price of money. The price of money will increase due to an increase in the quantity of money demanded (and an increase in demand). Investors see the economy recovering, and in the process of this recovery, they see an increase in demand for money (loans etc.) to buy new capital and purchase other nondurables. Therefore the price of money increases and thus the spread increases.
When the rate of interest falls the demand for capital increases because it is cheaper to borrow money.