what are a few factors necessary for economic growth related to changes in aggregate supply and demand?
I know The factors necessary for economic growth include more capital, more labor, and technological change, cause an increase in aggregate SUPPLY, but i don't know about aggregate "demand".
Economic growth depends upon consumer and business (and government) spending.
http://www.investopedia.com/terms/a/aggregatedemand.asp#axzz21CMVxeOM
http://economix.blogs.nytimes.com/2011/08/16/its-the-aggregate-demand-stupid/
To understand the factors necessary for economic growth related to changes in aggregate demand, we need to consider how changes in consumption, investment, government spending, and net exports can affect the overall demand for goods and services in a country's economy.
1. Consumption: Increased consumer spending is a key driver of aggregate demand. Factors such as rising incomes, improved consumer confidence, and favorable lending conditions can all lead to increased consumption and stimulate economic growth.
2. Investment: Higher levels of investment in physical and human capital contribute to economic growth by increasing productivity and expanding production capacity. Investment can be driven by factors such as low interest rates, technological advancements, government incentives, and business confidence.
3. Government Spending: Changes in government spending can have a significant impact on aggregate demand. When the government increases its spending on infrastructure projects, education, healthcare, or other areas, it creates additional demand for goods and services, which can stimulate economic growth.
4. Net Exports: Changes in net exports, which represent the difference between exports and imports, affect aggregate demand. Higher levels of exports contribute positively to aggregate demand, while higher levels of imports have the opposite effect. Factors that influence net exports include exchange rates, trade policies, global economic conditions, and competitiveness.
Understanding these factors helps policymakers and economists formulate strategies to manage aggregate demand and promote economic growth. By analyzing consumption patterns, investment trends, government spending, and trade dynamics, it becomes possible to assess and address the factors shaping aggregate demand in an economy.