Aggregate demand
Definition. Aggregate demand is the total planned spending on an economy domestically produced goods and services at each general price level over a period of time. It comprises consumption, investment, government spending and net exports, and is normally drawn as downward sloping against the general price level.
In words, aggregate demand equals consumption plus investment plus government spending plus exports minus imports. A change in any component shifts the curve and influences real output, employment and prices.
This term belongs to Aggregate Demand and Aggregate Supply in A Level Economics. Read the full chapter for the diagrams, worked examples and exam technique.
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