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AD and AS (AD (Consumption expenditure (Level of consumer confidence,…
AD and AS
AD
Consumption expenditure
Level of consumer confidence
Interest rates & availability of credit
Level of disposable income
Level of wealth of households
Level of household indebtedness
Expectations for future prices
Investment expenditure
Interest rates
Level of business confidence
Level of corporate tax
Level of corporate indebtedness
Changes in technology
Government expenditure
Economic factors: deliberate stimulation of economy (recession)
Political factors: Increased spending on healthcare and education before GE
Net exports
Relative changes in income level
Exchange rate
Domestic prices relative to foreign prices
Changes in level of trade protection
SRAS
Assumes that prices of goods are fixed
Factors
Price of inputs
Technological advances
LRAS
Technological advances