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15 August, 10:35

How do future expectations of an improving economy affect aggregate demand

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  1. 15 August, 10:58
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    Increase the aggregate demand. This means, that the total demand for goods and services within a particular market will increase

    Explanation:

    The future expectations of an improving economy increase the aggregate demand. This means, that the total demand for goods and services within a particular market will increase as there is more trust in the market.

    The rise in the income is another important factor for the aggregate demand to increase. With improving expectations the consumers will think that they income will improve and therefore their consumption levels.
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