Aggregate Demand

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Description of Aggregate Demand. Explanation.

 

Definition Aggregate Demand. Description.


Aggregate Demand is the total of all planned expenditure in an economy at each level of prices during a specific time period.


It is the total of all desired expenditure at any time by all groups in the economy. The main spending groups are consumers (Consumption), companies (Investments), government (Government Expenditure). Exports must be added; imports must be subtracted.


In a formula: Aggregate Demand is = Consumption + Investments + Government Expenditure + (Exports - Imports)


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Compare also: Aggregate Supply  |  Disaggregation  |  Vendor Managed Inventory

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