Final answer:
Strong economic growth in China positively impacts the U.S. aggregate demand by increasing demand for U.S. exports, which has grown significantly over the past decade. This can bolster U.S. businesses and potentially create jobs. However, shifts in China's economy can also affect global competition and trade dynamics.
Step-by-step explanation:
Strong economic growth in China has a significant impact on aggregate demand in the United States. Given that China is the United States' third largest export market and exports to China have grown 294% over the past decade, a thriving Chinese economy increases demand for U.S. goods, thereby expanding U.S. exports. More exports contribute to higher aggregate demand in the U.S. economy.
However, there are complexities to this relationship. If China's growth continues, it could signal sustained demand for U.S. products, helping to bolster American businesses and potentially creating jobs. Conversely, if China's economy contracts, it could lead to a decline in export demand, which might negatively affect the U.S. economy. Additionally, a booming Chinese economy might also mean stronger competition for U.S. companies both domestically and globally.
Therefore, while China's economic growth can positively affect aggregate demand in the U.S., it is also intertwined with the broader dynamics of international trade, currency fluctuation, and global competition.