Aggregate Demand §

Group: 4 #group-4

Relations §

• Fiscal Policy: Expansionary fiscal policy, such as tax cuts or increased government spending, can increase aggregate demand.
• Consumer Confidence: Higher consumer confidence can lead to increased consumer spending and aggregate demand.
• Interest Rates: Lower interest rates can stimulate investment and consumer spending, increasing aggregate demand.
• Monetary Policy: Expansionary monetary policy, such as lowering interest rates, can increase aggregate demand.
• Net Exports: Net exports, the difference between exports and imports, is a component of aggregate demand.
• Consumer Spending: Consumer spending is a major component of aggregate demand, representing household consumption expenditures.
• Aggregate: In economics, aggregate demand is the total demand for goods and services in an economy.
• Investment Spending: Investment spending by businesses on capital goods and inventory is a component of aggregate demand.
• Government Spending: Government spending on goods and services is a component of aggregate demand.
• Business Confidence: Higher business confidence can lead to increased investment spending and aggregate demand.
• Inflation: Higher inflation can reduce the real value of income and wealth, decreasing aggregate demand.
• Income Level: Higher income levels tend to increase consumer spending and aggregate demand.