Aggregate Demand

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    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)

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