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Increase in Consumption

An increase in consumption will cause the AD curve to shift to the right. This increase can be caused by higher incomes leading to more confident households. The increase in consumption is caused by an increase in demand goods and services.

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Tycho, Guta, Jordi:  Decrease in Investment

Investment can decrease through a spike in interest rates and lower future confidence of firms. For example, if companies are expecting a decline in their market value, suppliers will not invest in capital for producing their good. Higher interest rates also discourages suppliers from borrowing money for investment since they may not be able to recuperate their costs.

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Valeria Cruz & Audrey Cui: Decrease in Exports (X - M)

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Valeria Cruz & Audrey Cui: Decrease in Exports (X - M)

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Exports, or income that is obtained from abroad, adds to the aggregate demand of an  economy. As the number of exports decreases, the aggregate demand will decrease as well. This is because money is subtracted from the decreased demand of foreigners, shifting the AD curve to the left. For example, as Finland demands less of America's horses, there will no longer be as much money going into the county and exports will drop in percentage.

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A decreasing trend in the market that will cause a decrease in expectations.

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Increase in Imports

An increase of imports would decrease the GDP as the money spent on imports go towards the Country of origins GDP as opposed to America's.

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Net exports can increase as they are linked to the income of foreigners. As their income increases, they have more money to spend and therefore they buy more exports. This cause the AD curve to shift to increase and shift to the right, signifying an increase in real GDP. For example, the amount of exports in Australia is increasing, meaning that more people abroad are buying goods and services from Australia, which is only possible if they have more and more money to purchase those goods and services.

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Increase in Exports

Government encourages exports. An increase in exports leads to increase in jobs, result in higher wages and raise the standard of living. Exports also increase foreign exchange. Exports ultimately bring money into the economy, which increases the exporting nations GDP. Exporting products can ensure increasing sales and sales potential. For example the growth of US potato exports would expand trade and therefore expand profit.

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Aliyah, Michelle
An increase in government spending will shift the aggregate demand curve to the right. For example, an increase in government spending on education will shift the AD curve to the right.

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Increase in Exports
Exports can increase through a

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A decrease in consumption would be an increase in aggregate demand (AD) and a leftward shift of the curve. This means that at one price level, there's less AD's. For example, when home values increase making consumers feel less wealthy, the consumption of household items like food, clothing, and energy decrease and the AD for those items decrease with it.

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A decrease in household consumption will decrease the aggregate demand. This means that at every price level in that economy the consumption falls therefore the aggregate demand curve will shift to the left. For example if home values go down ten families will feel poorer. Therefore if they are ¨poorer¨ then they spend less and the aggregate demand falls.

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Increase in Imports
An increase in imported goods will decrease the aggregate demand. A country where the product is being imported from is benefiting  from the GDP of the produced good therefore decreasing the aggregate demand for the country consuming the good.

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Increase in Government Spending

When government spending increases, there is going to be an increase in taxes imposed on consumer products. The government uses increased taxes to compensate for the spending. This causes a reduction in expenditure, which in turn causes consumer wealth to decrease, shifting the curve leftward. When the taxes are higher, products seem more expensive thus discouraging consumers from actually buying the product.

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Decrease in imports:
Would cause the AD to decrease because there is less spending on supplies coming in.

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Increase in Consumption
An increase in consumption would lead to an increase in AD because consumption is Consumption is the value of goods and services bought by people, if that increases that means the demand had to go up making the AD larger. For example, if more people are buying things, that must mean that they demand it and if consumption is up so is demand. Aggregate demand goes up when the total demand for products goes up; therefore, when consumption increases, so does AD.

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Decrease in government spending
Def.  A decrease in government spending leads to a decrease in AD. This is because government spending is a component of AD, so when government spending is down, the aggregate demand also goes down. For example if government were to decrease spending on education, the industries involved in education stop their investments since the government gave them less money to use.

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Increase in Investment

An increase in investment will cause the nation's Aggregate Demand to increase and the AD curve to shift to the right. As investment levels increase, consumption will also increase as firms are spending more money on capital and will also be more confident in business opportunities or sales and borrow more money to buy new capital equipment.