the aggregate demand curve shifts in when?

Expert Solution

When the aggregate demand represented by a curve it is known as aggregate demand curve.Bagga demand curve represent the total quantity of all goods and services demanded by the economy at different price levels. Discover is also a downward sloping to the right curve. Aggregate demand model is a model that shown what determinants total supply or total demand for the economy and how total demand and total supply interact at the micro economic level.aggregate demand components can change because of different personal choice like those resulting from consumer to business confidence from policy choice like change in government spending and taxes. Battery ke demand curve shift to the right as the component of aggregate demand.consumption spending investment spending government spending and spending on export minus imports rise. Aggregate demand curve shift back to the left as these components fall.whether equilibrium output changes relative Li more than the price level or whether the price level changes relative Li more than output is determined by where the aggregate demand curve intersect with the aggregate supply curve.

as we know aggregate demand components can change because of different personal choice like those resulting from consumer or business confidence are from policy choices like changes in government spending and taxes. The aggregate demand curve tend to shift to the left when total consumer spending declines. Consumers might spend less because the cost of living is rising or because government taxes have increased. Consumer medical in to spend less and save more if they expect price to rise in the future. It might be that consumer time preferences change and future consumption is valued more highly than present consumption.
Because of above causes aggregate demand curve shift in.

Rahul Sunny answered 8 months ago

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