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The aggregate demand curve illustrates the relationship between the price level and total expenditure in an economy. The equation for this curve is given by: P=a+bY, where P represents the price level of inputs, a is income (outputs) and b is autonomous consumption.

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This means that if input prices fall then there will be more purchases of these lower-priced goods (i.e., people have more money to spend so they buy other things as well). Thus, it can be said that a fall in input prices shifts the aggregate demand curve down and to the right – meaning that at any point on the original AD schedule we would now see higher levels of production and consumption than before with fewer units sold or purchased at each price level. 

For example, A falling input market has lowered prices for businesses that are purchasing inputs like materials and machinery. With those lower costs, companies expand their operations by investing in expansion projects such as new factories or hiring workers which increase economic activity in our country.


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