Table 17.1 Factors that Shift the Aggregate Demand Curve

When this happens, . . .	. . . aggregate demand increases:	But when this happens, . . .	. . . aggregate demand decreases:
Changes in expectations:
When consumers and firms become more optimistic, . . .	. . . aggregate demand increases.	When consumers and firms become more pessimistic, . . .	. . . aggregate demand decreases.
Changes in wealth:
When the real value of household assets rises, . . .	. . . aggregate demand increases.	When the real value of household assets falls, . . .	. . . aggregate demand decreases.
Size of the existing stock of physical capital:
When the existing stock of physical capital is relatively small, . . .	. . . aggregate demand increases.	When the existing stock of physical capital is relatively large, . . .	. . . aggregate demand decreases.
Fiscal policy:
When the government increases spending or cuts taxes, . . .	. . . aggregate demand increases.	When the government reduces spending or raises taxes, . . .	. . . aggregate demand decreases.
Monetary policy:
When the central bank increases the quantity of money, . . .	. . . aggregate demand increases.	When the central bank reduces the quantity of money, . . .	. . . aggregate demand decreases.