Aggregate Demand
The total amount of goods and services demanded in the economy at a given overall price level and in a given time period. It is represented by the aggregate-demand curve, which describes the relationship between price levels and the quantity of output that firms are willing to provide. Normally there is a negative relationship between aggregate demand and the price level. Also known as "total spending". Investopedia Says:
Aggregate demand is the demand for the gross domestic product (GDP) of a country, and is represented by this formula:
Aggregate Demand (AD) = C + I + G (X-M) C = Consumers' expenditures on goods and services. I = Investment spending by companies on capital goods. G = Government expenditures on publicly provided goods and services. X = Exports of goods and services. M = Imports of goods and services. Related Terms:
Aggregate Supply
Consumer Price Index - CPI
Cost-Push Inflation
Demand
Demand-Pull Inflation
Elastic
Gross Domestic Product
Producer Price Index - PPI
Quantity Demanded
Supply |