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What can shift the aggregate demand curve?
aggregate demand increases (the curve shifts to the right) when:
|Consumption Increases:||Investment Increases:||Government Increases:||Net exports Increases:|
|Consumer confidence increases||Business confidence increases
|Government spending increases*||Foreigners' preference for your goods increases|
|Income taxes decrease*|
|Interest rate decreases**||Exchange rate decreases|
* If changes to taxes and government spending are designed to change output or inflation by influencing the aggregate demand curve, it is called fiscal policy.
** If changes to the interest rate are caused by the central bank changing the money supply in order to influence output or inflation, then it is called monetary policy.