Aggregate Demand or Aggregate Supply Essay Example | Topics and Well Written Essays - 250 words

Aggregate Demand or Aggregate Supply - essay ExampleThe story line of the article is directly based on nitty-gritty demand. Aggregate demand is made up of a number of variables, namely, consumption, investment, presidency spending, and net imports. A decline in the value of the one dollar bill causes a rise in consumer prices, and higher prices depict the occurrence of inflation (Kadlec, 2012). As a result, consumption becomes relatively expensive, and it is, therefore, bound to decline. In this scenario, government spending increases to fill the gap. Decline in the value of the dollar made imports expensive and exports favorable. Net imports change magnitude due to low imports and high exports activities. This impacts the aggregate demand positively. Therefore, Kadlecs story had a positive impact on aggregate demand.The variables that make up aggregate demand directly influence both domestic and international markets. Countries engage in trade and exchange activities using some of the major world currencies. The U.S dollar is a primary currency in international exchange activities. Fluctuations in its value influence world markets differently, especially in relation to changes in consumer