ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -For example, when foreign price levels fall relative to the price level in the United States, U.S. goods and services become relatively more expensive, reducing exports and boosting imports in the United States. Such a reduction in net exports reduces aggregate demand.

Detailed explanation-2: -The aggregate demand curve tends to shift to the left when total consumer spending declines. 2 Consumers might spend less because the cost of living is rising or because government taxes have increased. Consumers may decide to spend less and save more if they expect prices to rise in the future.

Detailed explanation-3: -An increase in net exports will directly affect the combination demand curve because it causes planned expenditure to extend. So, the equilibrium within the market will shift, which suggests aggregate demand will increase.

Detailed explanation-4: -Income and Wealth As household wealth increases, aggregate demand typically increases. Conversely, a decline in wealth usually leads to lower aggregate demand. When consumers are feeling good about the economy, they tend to spend more and save less.