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Aggregate Demand and Supply. Aggregate Demand and Supply. Aggregate Demand (AD). Consumption Expenditure. Tax rates Wage increases Credit Interest rates Wealth Property Shares Savings Bonds. Investment Expenditure. Machinery Equipment Buildings Infrastructure. Government Spending.
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Consumption Expenditure • Tax rates • Wage increases • Credit • Interest rates • Wealth • Property • Shares • Savings • Bonds
Investment Expenditure • Machinery • Equipment • Buildings • Infrastructure
Government Spending • Defence • Health • Social Welfare • Education • Foreign Aid • Regions • Industry • Law and Order
Import Spending (negative) • Goods and services bought from abroad
Export Earnings (Positive) • Goods and services sold abroad
Fiscal Policy • Government Income (taxes and borrowing) • Government Spending
Monetary Policy • Interest Rates (Bank of England)
Capacity of the Economy • Costs of Production • Technology • Education and Training • Incentives • Tax regime • Capital stock • Productivity • Labour Market