Changes

The aggregate demand curves downwards. There are various reasons for this, including:

The aggregate demand curves downwards. There are various reasons for this, including:

*The lower the price level, the richer individuals perceive themselves to be and the more they consume.

*The lower the price level, the richer individuals perceive themselves to be and the more they consume.

*When price levels are low, the reserve bank tends to decrease interest rates, resulting in higher consumption.

*When price levels are low, the [[reserve bank]] tends to decrease [[interest rates]], resulting in higher consumption.

*A lower price level improves the international competitiveness of a country, resulting in higher net exports.

*A lower price level improves the international competitiveness of a country, resulting in higher net [[exports]].

==References==

==References==