determinatns and curve shift

Own price and quantity demanded

A change in a good's own price causes a movement along its demand curve, ceteris paribus.

Income and demand for a normal good

A rise in income increases demand for a normal good, shifting its demand curve to the right, ceteris paribus.

Income and demand for an inferior good

A rise in income decreases demand for an inferior good, shifting its demand curve to the left, ceteris paribus.

Tastes and demand

A change in preferences towards a good increases demand and shifts its demand curve to the right.

Price of a substitute and demand

A rise in the price of a substitute increases demand for the original good as consumers switch towards it.

Price of a complement and demand

A rise in the price of a complement decreases demand for the original good because the two goods are used together.

Expected future price and demand

If consumers expect a higher future price, current demand may rise as they bring purchases forward.

Number of consumers and market demand

An increase in the number of consumers increases market demand, ceteris paribus.

Own price and quantity supplied

A change in a good's own price causes a movement along its supply curve, ceteris paribus.

Production costs and supply

A rise in production costs decreases supply and shifts the supply curve to the left, ceteris paribus.

Technology and supply

Improved technology can lower production costs and increase supply, shifting the supply curve to the right.

Indirect tax and supply

An increase in an indirect tax raises the cost of supplying each unit and shifts the supply curve upwards or to the left.

Subsidy and supply

A subsidy reduces effective production costs and shifts the supply curve downwards or to the right.

Competitive supply and price

A rise in the price of a competing product may lead producers to switch resources towards it, decreasing supply of the original good.

Joint supply and price

A rise in the price of one jointly produced good may increase production of it and therefore increase supply of the other good produced alongside it.

Expected future price and supply

If producers expect a higher future price, they may reduce current supply and hold stocks for later sale when storage is possible.

Number of firms and market supply

An increase in the number of firms increases market supply, ceteris paribus.

Weather and supply

Favourable weather can increase the supply of agricultural products, while adverse weather can decrease it.

Substitutes and PED

The more close substitutes a good has, the more price elastic demand tends to be because consumers can switch more easily.

Necessity and PED

The more necessary a good is, the more price inelastic demand tends to be because consumers find it harder to reduce consumption.

Income proportion and PED

The larger the proportion of income spent on a good, the more price elastic demand tends to be because a price change has a greater effect on the consumer's budget.

Time and PED

Demand tends to become more price elastic over time because consumers have more opportunity to find substitutes and change their habits.

Addiction and PED

Demand for an addictive good may be price inelastic because consumers find it difficult to reduce consumption after a price rise.

Time and PES

Supply tends to become more price elastic over time because firms have more opportunity to obtain resources and increase capacity.

Spare capacity and PES

More unused productive capacity makes supply more elastic because firms can increase output more easily.

Resource mobility and PES

The more easily resources can move between uses, the more elastic supply tends to be because firms can obtain inputs more easily.

Storage and PES

Goods that can be stored tend to have more elastic supply in the short run because existing stocks can be released when prices rise.

Production time and PES

Goods that take a long time to produce tend to have less elastic supply in the short run because output cannot be increased quickly.

Rate of cost increases and PES

If production costs rise rapidly as output expands, supply tends to be less price elastic.

Price level and aggregate demand

A change in the general price level causes a movement along the aggregate demand curve, ceteris paribus.

Consumer confidence and AD

Greater consumer confidence can increase consumption and shift aggregate demand to the right.

Interest rates and consumption

Lower interest rates can encourage borrowing and reduce the reward for saving, increasing consumption and aggregate demand.

Household wealth and AD

An increase in household wealth can encourage consumption and shift aggregate demand to the right.

Income taxes and AD

Lower income taxes increase disposable income and may increase consumption and aggregate demand.

Household debt and AD

High household debt may reduce consumption because households use more income to repay loans or are reluctant to borrow.

Expected future prices and AD

If households expect prices to rise, they may bring purchases forward, increasing current consumption and aggregate demand.

Business confidence and AD

Greater business confidence can increase investment and shift aggregate demand to the right.

Interest rates and investment

Lower interest rates reduce borrowing costs and may encourage firms to invest, increasing aggregate demand.

Business taxes and AD

Lower business taxes may increase expected after tax profits and encourage investment, increasing aggregate demand.

Technology and investment

New technology may encourage firms to invest in capital goods, increasing aggregate demand.

Corporate debt and investment

High corporate debt may discourage further borrowing and investment, reducing aggregate demand.

Government spending and AD

An increase in government spending directly increases aggregate demand, ceteris paribus.

Trading partner income and AD

Higher income in trading partner countries can increase demand for exports and shift aggregate demand to the right.

Exchange rates and AD

A currency depreciation can increase net exports and aggregate demand if changes in export and import quantities are sufficiently responsive.

Trade policy and AD

A change in trade barriers can affect exports and imports, changing net exports and aggregate demand.

Production costs and SRAS

A rise in production costs decreases short run aggregate supply and shifts its curve to the left.

Indirect taxes and SRAS

Higher indirect taxes increase firms' costs and can shift short run aggregate supply to the left.

Quantity of resources and LRAS

An increase in the available quantity of labour, capital or other productive resources can increase long run aggregate supply.

Quality of resources and LRAS

Improved skills, education or health can raise productivity and increase long run aggregate supply.

Technology and LRAS

Technological improvements can increase productivity and productive capacity, shifting long run aggregate supply to the right.

Institutions and LRAS

More effective institutions, such as reliable legal and financial systems, can encourage investment and increase productive capacity.

Foreign demand for exports and currency demand

Greater foreign demand for a country's exports increases demand for its currency, putting upward pressure on its exchange rate.

Domestic demand for imports and currency supply

Greater domestic demand for imports increases the supply of domestic currency in foreign exchange markets, putting downward pressure on its exchange rate.

Inward foreign direct investment and currency demand

More inward investment may increase demand for the domestic currency as foreign investors acquire domestic assets.

Outward foreign direct investment and currency supply

More outward investment may increase the supply of domestic currency as investors purchase foreign currency to acquire assets abroad.

Interest rates and currency demand

Higher domestic interest rates relative to those abroad may attract foreign financial investment and increase demand for the domestic currency.

Inflation and the exchange rate

Higher domestic inflation relative to trading partners can reduce export competitiveness and increase demand for imports, putting downward pressure on the currency.

Speculation and currency demand

If traders expect a currency to appreciate, they may buy it now, increasing current demand for it.

Remittances and currency demand

Remittances received from abroad may increase demand for the recipient country's currency when foreign currency is exchanged for it.

Central bank intervention and currency demand

A central bank can buy its currency using foreign reserves to increase demand for it and support its exchange rate.

Central bank intervention and currency supply

A central bank can sell its currency to increase its supply in foreign exchange markets and put downward pressure on its exchange rate.