The amount of money in the economy can have a major effect on aggregate demand.
What is the relationship between money supply and aggregate demand?
The effect on aggregate demand would be the same as if the government had chosen to tax now.
For example, an increase in the interest rate will cause aggregate demand to decline.
But what happens to the real wage rate following a fall in aggregate demand?
The reason is that the increase in money supply will raise aggregate demand.
Economic policy actions which are designed to affect aggregate demand.
The point is that the relationship between aggregate demand and employment growth looks to me as if it has broken down.
In the short run, investment spending directly supports aggregate demand and growth.
Consumption and investment are two major components of aggregate demand.
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