What is the Aggregate Demand in an economy?
The aggregate demand (AD) is the total quantity produced in an economy at a given price and is equal to the national income and real GDP.
AD is composed of 4 parts: Consumption (C), Investment (I), Government spending (G), Net exports (X-M)
The formula is AD = C + I + G + (X-M)
HC
Related Economics A Level answers
All answers ▸What is price elasticity of demand and how does it affect equilibrium prices and quantities?
Why does the Price Mechanism exist and what are the functions of it?
How does income affect the Demand curve?
Please identify and explain the 2 main factors that cause the downward sloping demand curve.