Aggregate Demand

Discipline: Economics

Aggregate demand, also referred to as aggregate spending, or aggregate expenditure, is the total demand for economic output in an economy at a given price level.

Aggregate demand includes the demand for export products but excludes goods and services produced but not sold. In other words, aggregate demand is different from aggregate output. That is because the main concern of this measure is to calculate the total value of 'demanded output in an economy' - be it sold dometically or exported.

Aggregate demand is calculated as follows:

Aggregate demand = Consumption expenditures + government expenditures + investment expenditures + net exports

Also see: aggregate demand theory, aggregate output, aggregate supply, demand


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