Business cycles
Increase in AD
Factors of AD
Aggregate demand could be increased by numerous reasons:
- increase in export arising from economic growth in closely related foreign economies;
- more optimistic firms` future expectations that increases investment expenditures;
- technological change that increases investment expenditures;
- more optimistic people`s future expectations that increase consumption expenditures;
- government expansionary fiscal policy;
- central bank`s expansionary monetary policy.