Aggregate Demand ( Factors)

WHAT WILL HAPPEN TO AD + component

Consumer confidence improves as consumers become more optimistic about future conditions

• C

  AD increases

• G

  AD decreses

• I

  AD increases

• NX

  AD decreases

WHAT WILL HAPPEN TO AD + component

The government decides to increase taxes on a firms profits

• C

  AD increases

• G

  AD decreses

• I

  AD decreases

• NX

  AD decreases

WHAT WILL HAPPEN TO AD + component

Firms become fearful a recession is about to begin

• C

  AD increases

• G

  AD decreses

• I

  AD decreases

• NX

  AD decreases

WHAT WILL HAPPEN TO AD + component

The government decides to increase spending on health care services

• C

  AD increases

• G

  AD increases

• I

  AD decreases

• NX

  AD decreases

WHAT WILL HAPPEN TO AD + component

Their is a decline in house prices

• C

  AD decreases

• G

  AD increases

• I

  AD decreases

• NX

  AD decreases

WHAT WILL HAPPEN TO AD + component

Their is an increase in the indebtedness of firms and consumers

• C

  AD decreases

• G

  AD increases

• I

  AD decreases

• NX

  AD decreases

WHAT WILL HAPPEN TO AD + component

The government lowers personal income taxes

• C

  AD increases

• G

  AD increases

• I

  AD decreases

• NX

  AD decreases

WHAT WILL HAPPEN TO AD + component

There is an increase in the value the baht to the euro

• C

  AD decreases

• G

  AD increases

• I

  AD decreases

• NX

  AD decreases

WHAT WILL HAPPEN TO AD + component

New legislation (Laws) make property rights secure

• C

  AD increases

• G

  AD increases

• I

  AD decreases

• NX

  AD decreases

WHAT WILL HAPPEN TO AD + component

The central bank increases interest rates

• C

  AD decreases

• G

  AD increases

• I

  AD decreases

• NX

  AD decreases