Aggregate Demand and Supply Model

Factors Affecting Aggregate Demand

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Christian Bien

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What is Aggregate Demand?
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Aggregate Demand is the total demand for an economy's goods and services. Aggregate demand consists of the sum of consumption, investment, government expenditure and net exports. AD = C + I + G + (X-M) Notice how the components of aggregate demand are the injections of an economy in a circular flow (minus imports),

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What are the Factors Affecting Aggregate Demand?
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The factors affecting aggregate demand are the factors affecting the components of consumption, investment, government expenditure and net exports. These can be found in the aggregate expenditure section: - Factors Affecting Consumption - Factors Affecting Investment - Factors Affecting Government Expenditure - Factors Affecting Net Exports

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