Aggregate demand equation

Aggregate demand curve

Why does the aggregate demand curve slope downwards?
- competitiveness of goods abroad?
Is real income less or more?

Real income effect

Real balance effect

International substitution effect
- give an example

AD will shift when..

There are three factors that shift the AD curve

Fiscal policy

Monetary policy

Monetary policy pt 2

Exchange rates (XR)
AD = C +I +G = (X-M)

Changes in expectation

changes in household wealth

C

I

G

x

M

What causes changes investment?