Aggregate Demand- Macro Topic 3.1 (Old Version)

Mr. Clifford introduces aggregate demand, explaining it as the total demand for all goods and services in an economy. He outlines the four components of GDP: consumer spending, investment, government spending, and net exports. The aggregate demand curve is downward sloping due to the wealth and interest rate effects. Changes in these components can shift the curve. Practical examples illustrate how factors like stock market changes, government spending, and international trade affect aggregate demand.

How does an increase in the stock market affect consumer spending and aggregate demand?

What happens to aggregate demand when government spending decreases?