00:01
Looking at the aggregate demand curve and why it might shift to the right or why it might shift to the left.
00:05
And to look at this, we can recall real quick the different pieces that make up the aggregate demand curve, which are consumption, investment, government expenditure, and net export.
00:15
So we have to somehow be increasing one or more of these variables here in order to shift that aggregate demand curve to the right.
00:22
So there are a couple different things that could actually cause some of this to happen.
00:25
So suppose first that there were to be a decrease in the interest rate.
00:32
Well, if interest rates drop, as a result of this, people are going to be more willing to invest.
00:37
So here we would see an increase in the investment piece of the aggregate demand curve, thus shifting that curve to the right.
00:44
Suppose also here that we were to experience a decrease in taxes.
00:50
Well, if the tax rate declines, people are going to have more disposable income, meaning they're going to consume more.
00:56
So we'll see an increase in consumption, therefore shifting the curve to the right.
01:00
And a third possibility here would be a decrease in the u .s.
01:04
Exchange rate...