The Components of Aggregate Demand (HSC SSCE Economics): Flashcards

Household consumption (over 50%)

Proportion of total income spent on consumption

Business investment

Export revenue minus import spending

Leads to higher overall consumption/spending

Discourages borrowing, encourages saving, reduces spending

Higher govt spending and/or lower taxation

Makes exports cheaper, increases export demand

10-15%

Spend higher proportion of income than higher earners