Aggregate demand

Definition of Aggregate demand

In macroeconomics, aggregate demand is recognized by the total amount of demand of final goods and services at a given overall price level in the present economy at a given time period. This term defines the demand for the gross domestic product of a country. It describes the relation between price levels and the sum of out that firms desire to provide.

Books on Aggregate demand

Book 1 –

Principles of Economics By N. Mankiw (published by Cengsage Learning, 2014)

Book 2 –

Macroeconomics for Today By Irvin Tucker (published by Cengage Learning, 2010)

How Aggregate demand works?

The mathematical equation that represents Aggregate Demand is,

Aggregate Demand (AD) = C + I + G + (X-M) C = Consumers' expenditures on goods and services.

I = Investment that companies spend on capital goods.

G = Government expenditures on publicly provided goods and services.

X = Exports of goods and services.

M = Imports of goods and services.

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