Changes in the following non-price level factors or determinants cause
changes in aggregate demand and shifts of the entire aggregate demand
(AD) curve.
Autonomous consumption (autonomous consumer spending) Ca,
which depends upon:
- consumer nominal wealth
- consumer expectations and confidence concerning job security and
future income
- money supply
- autonomous taxes Ta (e.g., sales and property taxes)
Planned investment spending I, which depends upon:
- real interest rates (i.e., changes in interest rates not caused
by changes in the price level)
- business profit expectations or the expected rate of return
- business taxes
- money supply
Government spending G:
Net export spending X:
|