what affects aggregate demand 
interest rates affect decisions made by consumers and businesses lower interest rates will lower the borrowing costs for big ticket items such as appliances vehicles and homes and companies will be able to borrow at lower rates often leading to capital spending increases higher interest rates increase the cost of borrowing for consumers and companies and spending tends to decline or grow at a slower pace as household wealth increases aggregate demand typically increases conversely a decline in wealth usually leads to lower aggregate demand when consumers are feeling good about the economy they tend to spend more and save less consumers who anticipate that inflation will increase or prices will rise tend to make immediate purchases leading to rises in aggregate demand but if consumers believe prices will fall in the future aggregate demand typically falls 