What causes an increase in aggregated demand?

Aggregated demand is the sum of the combined demand for goods and services in the economy in the considered period. Several factors can lead to an increase in aggregated demand, such as monetary policies, fiscal policies, wage increases and citizens' expectations. All these factors are macroeconomic factors that can increase aggregated demand.

Monetary policies cause increased demand because the country's central bank uses this particular economic factor as a tool to manipulate citizens in the country. If the central bank perceives a permanent general decline in the level of demand, it may decide to reduce interest rates to encourage more people to spend money. Reducing interest rates causes banks in the country to reduce the interest of savings, reducing incentives for people to save money. Reduced interest rates also mean that loans and loans are easier to consume consumers, which gives the means to buy goods and services.

Government fiscal policies may, under certain circumstances, lead to an increase in aggregated demand. For example, a reduction in income tax leads to an increase in money that consumers must spend. Such an increase in one -off income may be reflected in an increase in aggregated demand. The economic boom also leads to an increase in aggregated demand, as such periods are usually supported by increasing consumer confidence, resulting in greater demand for products and services.

Expectations of inflation by consumers may lead to an increase in the overall demand that has a consumer. When people feel that there are lack of commodities or that the price of certain commodities will soon increase, this can lead to a panic, because people buy goods in large quantities and accumulate them. DRIGHT Actions leads to an increase in aggregated demand for goods and services.

The right combination of fiscal policies, monetary policies and a stable economy can lead to increasedDemand for local products and raw materials from other countries. Such external demand will lead to an increase in domestic exports and is also influenced by other factors, such as favorable tax regimes and reduced their own duties. This type of demand is also a contributing factor to increasing the overall aggregated demand in the economy.