Aggregate Demand curve slopes down from left to right, because of factors:
1. Wealth effect
2. UK exports fall in price, and increase in demand = greater demand for domestically-produced goods
3. Expectations, i.e. if consumers expect prices to rise in the future they will increase consumption
Factors affecting the (determinants of) aggregate demand:
Factors that decide decisions to invest or not:
1. Rate of interest > fall in interest rate(s), borrowing becoming cheaper and firms will want to invest in new equipment to maintain/improve their competitive position.
2. Business Expectations > i.e. when…