Inflation -> aggregate demand

what will make Consumer ↑

income ↑

Consumer confidence ↑

Inflationary expectations/future prices ↑

direct tax/income tax ↓

Interest rates ↓

Consumer ↑ means…

AD ↑ (C) 

what will make investments ↑

interest rates ↓

business confidence ↑

Investments ↑ means…

AD ↑ (I)

what will make Government ↑

Government spending decisions ↑

Government ↑ means…

AD ↑ (G)

what will make X - exports ↑

Exchange rate ↓

trade barriers (oversea) ↓

overseas demand ↑

taste/preferences  ↑

X - exports ↑ means that…

AD ↑ (X)

M - imports ↓ means that…

exchange rates ↓

taste preferences  ↓

NZ trade barriers e.g trariffs ↑

When AD shifts to the right when it…

increases 

When AD shifts to the left when it…

decreases

When income is increasing, consumption increases, therefore

aggregate demand increases