Aggregate Demand

Aggregate Demand

• Aggregate demand (AD) is the total demand for goods and services produced in an economy at a given price level and in a given time period.
• This planned expenditure on domestic output comes from households, firms, the government and foreigners.
• It is made up of consumer expenditure (C), investment (I), government spending (G) and net exports (which is exports (X) minus imports (M))
  • So AD = C + I + G + (X – M)