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AGGREGATE DEMAND DETERMINANT: A ceteris paribus factor that affects aggregate demand, but which is assumed constant when the aggregate demand curve is constructed. Changes in any of the aggregate demand determinants cause the aggregate demand curve to shift. While a wide variety of specific ceteris paribus factors can cause the aggregate demand curve to shift, it's usually most convenient to group them into the four, broad expenditure categories -- consumption, investment, government purchases, and net exports. The reason is that changes in these expenditures are the direct cause of shifts in the aggregate demand curve. If any determinant affects aggregate demand it MUST affect one of these four expenditures.

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UTILITY: The satisfaction of wants and needs obtained from the use or consumption of goods and services. The terms utility and satisfaction are, for the most part, used interchangeably in economics. Two other somewhat technical economic terms frequently used to capture this notion are welfare and well-being. Whichever term is used, the underlying concept is the same: To what extent are unlimited wants and needs fulfilled using the goods and services produced from society's limited resources.

     See also | satisfaction | consumption | wants | needs | unlimited wants and needs | welfare | consumer demand theory | law of demand | scarcity | util | utility maximization |


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CONSUMER CONFIDENCE, AGGREGATE EXPENDITURES DETERMINANT

One of several specific aggregate expenditures determinants assumed constant when the aggregate expenditures line is constructed, and that shifts the aggregate expenditures line when it changes. An increase in consumer confidence causes an increase (upward shift) of the aggregate expenditures line. A decrease in consumer confidence causes a decrease (downward shift) of the aggregate expenditures line. Other notable aggregate expenditures determinants include interest rates, federal deficit, inflationary expectations, and exchange rates.

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