aggregate income

Why Is Aggregate Demand Equal To Aggregate Expenditure?

by

Why Is Aggregate Demand Equal To Aggregate Expenditure? An increase in the expenditure by consumption (C) or investment (I) causes the aggregate expenditure to rise which pushes the economy towards a higher equilibrium. Aggregate Expenditure – Equilibrium: In this graph, equilibrium is reached when the total demand (AD) equals the total amount of output (Y).

What Causes An Increase In Aggregate Demand?

by

What Causes An Increase In Aggregate Demand? If consumption increases i.e. consumers are spending more, therefore aggregate demand for goods and services will increase. Additionally, if investment increases i.e. if there is a fall in interest rates, then production will increase as technology improves and output increases. Therefore, demand will rise. What factors can increase