aggregate demand and supply

Lower interest rates shift aggregate demand curve to

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lower interest rates shift aggregate demand curve to the right as consumption and investment increase and higher interest rates cause AD curve to shift left. Fiscal Policy : changes in fédéral taxes and purchases that are intended to achieve macroeconomic policy aobjectives increase in GVT purchases or decrease in taxes = AD curve shifts right decrease in GVT purchases or increase in taxes = AD curves shift to the left - changes in the expectations of households and firms If households become optimistic about their future income and firms optimistic about future profitability of Investmt spending AD curve will shift to the left. - change in foreign variables 1.If firms and H buy less US goods and households in US buy more foreign goods, net exports will fall and AD curve will shift to the left 2.If real GDP in US increases faster than real GDP in other countries , net exports will fall. 3. exchange rate between dollar and foreign currencies rise net exports fall Aggregate Supply Long-Run Aggregate Supply Curve: In the long-run, the level of real GDP is determined by the capital stock/available technology, none of which is affected by changes in the price level.
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