Principles of Macroeconomics / Unit 8 MAC 0713 short lesson, about 20 seconds
What Shifts Aggregate Demand
Captions available
The idea
Anything that changes one of the four components at every price level. Confidence moves consumption and investment; government purchases and taxes move spending directly; foreign incomes and exchange rates move net exports.
In practice
Rising business confidence shifts the curve right; falling confidence shifts it left.
Where people slip
Falling confidence can be self-fulfilling, because spending less is what makes the downturn people feared.
Your place on the trail
Every lesson rests on earlier ones and opens later ones. Tap any to jump.
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