ECN 204 Chapter Notes - Chapter 10: Aggregate Supply, Aggregate Demand, Government Spending
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consumer spending: demand of output will shift the curve. Other factors that effects consumer spending are: consumer wealth, consumer expectations, household borrowing, personal taxes. Investment spending: decline in investment spending at each price level will shift the ad curve to the left (vice versa): www. notesolution. com: real interest rates, expected returns: expectations about future business conditions; technology; degree of excess capacity; business taxes. net export spending: based on national income abroad; and. Input prices: domestic resource prices (wages and salary) * per unit cost decrease, as curve shift to the right (vice versa: labour supply increases because of substantial immigration. legal instituational environement: changes may alter the per-unit cost and therefore shift the supply curve. Such changes are: business taxes and subsidies: higher business taxes increase per-unit cost, reducing as. A business subsidy lowers production costs and increase as: government regulation: more regulations lead to increased production costs .