Consumption, investment, government spending, net exports, and aggregate expenditures.
The aggregate demand curve shifts to the right
As war is an unexpected factor that impedes the economic growth of a country, it leaves the aggregate demand with no option but a slope negatively downwards in dicating higher price levels.
The aggregate demand curve will shift to the right as the economy expands. When that happens, the quantity of output demanded for a given price level rises.
Anything -other than the desired (product/service)'s price- that would change the demand for a product/service would increase aggregate demand. Some examples may be: increased incomes, increased population, increased price of substitute products, etc..
Personal taxation is a amount taken by the Government or State from an individuals income. A cut in taxes would mean that people effectively have more income, therefore more income can be spent on goods and services. This ability for consumers to spend more means that they will demand more, shifting the aggregate demand curve to the right. It is the same in a business sense. If there was to be tax cuts for businesses, businesses have the ability to spend more in turn increasing aggregate demand. ~MB
The aggregate demand curve shifts to the right
The aggregate demand curve shifts to the right
AD is reduced and so is GDP
As war is an unexpected factor that impedes the economic growth of a country, it leaves the aggregate demand with no option but a slope negatively downwards in dicating higher price levels.
Anything -other than the desired (product/service)'s price- that would change the demand for a product/service would increase aggregate demand. Some examples may be: increased incomes, increased population, increased price of substitute products, etc..
The aggregate demand curve will shift to the right as the economy expands. When that happens, the quantity of output demanded for a given price level rises.
Personal taxation is a amount taken by the Government or State from an individuals income. A cut in taxes would mean that people effectively have more income, therefore more income can be spent on goods and services. This ability for consumers to spend more means that they will demand more, shifting the aggregate demand curve to the right. It is the same in a business sense. If there was to be tax cuts for businesses, businesses have the ability to spend more in turn increasing aggregate demand. ~MB
Anything -other than the desired (product/service)'s price- that would change the demand for a product/service would increase aggregate demand. Some examples may be: increased incomes, increased population, increased price of substitute products, etc..
if decrease a price or if the expectation of raising a price
Supply, demand, price, and cost would be the factors.
an increase in price level would lead to a fall in AE, vice versa. So by plotting those points out, you can derive an AD curve
Remember that aggregate demand is composed of consumer spending, investment spending, government spending, and net export spending. Many things affect consumer spending. The main things are consumer wealth, consumer expectations, household indebtedness, and taxes. The wealthier the consumers, the more they will spend. The higher the consumer's expectations are, the more they will spend. The lower the consumer's indebtedness, the more they will spend. The lower their taxes are, the more they will spend. If consumer spending increases, the aggregate demand curve will shift to the right. As for investment spendings: interest rates and expected returns affect this variable. As interest rates decrease, there will be more investments made. The higher a business's expected return is, the more they will invest. If more investments are being made, the aggregate demand curve will shift to the right. Change in government spending is pretty self explanatory. The more government decides to spend, the more aggregate demand will increase and therefore, shift to the right. For net expert spendings, a rising national income would mean more US exports. Moreover, a depreciation of the dollar causes more US exports. The more net exports there are, the more aggregate demand will increase and therefore, shift to the right.