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Factors affecting Aggregate Demand - Coggle Diagram
Factors affecting Aggregate Demand
Consumption (C)
It is consumer's expenditure or household spending
Positive
A rise in consumer confidence
A cut in income tax
An increase in wealth
An increase in population
A rise in the money supply
Negative
A decrease in consumer confidence
Increase in Income tax
Decrease in in population
Increase in interest rate
Investment (I)
Spending by private firms on capital goods
Positive
Rise in business confidence
cut in corporate tax
Advances in technology
Negative
Increase in interest rate
Increase in corporate tax
Net Export (X-M)
Difference between the value of export (X) and imports (M)
Positive
Devaluation of our country
Rise in the quality of domestic product
Increase in income abroad
Increase in demand for domestic product and a decrease in demand for foreign product
Negative
Increase in our currency exchange rate
decrease in income abroad
Decrease in demand for domestic product and increase demand for foreign product
Government Spending (G)
Spending by the government
Positive
Want to stimulate economic activity
Want to win political support
Negative
Want to reduce national debt
Income/Corporate tax rate are reduced