Sentences with phrase «aggregate demand falls»

Since the higher resource prices are paid to suppliers elsewhere in the world, this also acts somewhat like a tax on spending, hence aggregate demand falls.

But the effect of the higher prices, assuming they are typically paid to suppliers elsewhere in the world, also acts somewhat like a tax on spending, hence aggregate demand falls.

Not exact matches

Potential supply in some areas of the economy falls, but aggregate demand will probably rise rather than fall, due to the terms of trade gain, and it is more likely that there will be a problem of inflation in the non-traded sector.

Its austerity policies inhibit growth and constantly pull down aggregate demand, and when as a result the budget deficit grows instead of falls, that is used as a pretext for another massive round of cuts (another # 9.8 bn in this year alone).

These usually precede recessions, which often lead to falling interest rates as aggregate demand lessens.