Aggregate demand: total spending on goods and services in a time period at a given price level. Made up of consumption, investment, government spending, and net expenditure
When prices fall, consumers purchase more confidently. More goods will be consumed at a lower price
Goods will become more expensive so demand for domestic goods will increase
Expectations: consumers expect prices to rise in the future they will increase their consumption if they expect prices to fall later
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Any factor that changes aggregate demand will cause the AD curve to shift to the left or right
Consumption is the total spending by consumers on domestic goods and services
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Monetary policy:
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Shifts of Aggregate demand:
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