Aggregate Demand and Supply--Cathy

The aggregate demand curve inclued four aspects of content:

• Employment (employer and employee)
• Income (demand and supply)
• Inflation
• Payment (balance of payment)

Now, I will talking about income. At the same time, we have some things to think.

The first thing is income and why aggregate demand curves slope downwards? Because of import effect (Y=C+I+G+X-M), The second reason is that interest-rate effect (if price level goes up, the income goes down), the third reason is that savings effect (if price goes up, people choose savings more, it is lead to spent less and worse less).

Another thing is that the aggregate supply curve. At the same time, we are also need to think about that why eggregate supply aurve generally slope upwards ? If price going up everywhere, we have more advantage or disadvantage.