Aggregate demand refers to the total amount of goods and services that all sectors in an economy are willing and able to purchase at different price levels during a given time period.
Imagine aggregate demand as a shopping list for an entire neighborhood. It includes everything people want to buy, like groceries, clothes, electronics, etc., at various prices.
Consumer spending: Consumer spending is the portion of aggregate demand that comes from individuals purchasing goods and services.
Investment spending: Investment spending refers to businesses' expenditures on capital goods such as machinery or buildings.
Government spending: Government spending represents the amount spent by federal, state, and local governments on public goods and services.
AP Macroeconomics - 3.5 Equilibrium in Aggregate Demand-Aggregate Supply (AD-AS) Model
AP Macroeconomics - 3.7 Long-Run Self-Adjustment
AP Macroeconomics - 3.8 Fiscal Policy
AP Macroeconomics - 5.1 Fiscal and Monetary Policy Actions in the Short-Run
AP Macroeconomics - 5.2 The Phillips Curve
AP Macroeconomics - 5.5 Crowding Out
AP Macroeconomics - 5.7 Public Policy and Economic Growth
AP Macroeconomics - 6.3 Foreign Exchange Market
© 2024 Fiveable Inc. All rights reserved.
AP® and SAT® are trademarks registered by the College Board, which is not affiliated with, and does not endorse this website.