1. What does the aggregate demand curve show and what do its axes represent?

2. Why does the aggregate demand curve slope downward?

1. How does the demand curve for an individual product differ from the aggregate demand curve?

2. Why is a shift in demand from one product to another not necessarily a change in aggregate demand?

1. What is the wealth effect and how does it impact consumer spending?

2. How do changes in aggregate price levels affect consumer buying power and aggregate demand?

1. What is the interest rate effect and how do interest rate changes influence consumer and business spending?

2. How do higher and lower interest rates affect purchasing decisions for major purchases?

1. What is currency appreciation and depreciation, and how do they affect buying power for foreign goods?

2. How do exchange rate changes between countries impact the relative prices of goods and aggregate demand?

1. How do consumer expectations about the economy affect consumer spending and the aggregate demand curve?

2. What role do changes in wealth play in shifting aggregate demand?

1. How do business expectations about the economic future influence investment spending and aggregate demand?

2. What types of investments do businesses make when they expect strong economic growth?

1. How can increases in government spending shift the aggregate demand curve?

2. How do tax cuts and government transfers affect consumer spending and aggregate demand?