What is Aggregate Demand?

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).

What are the Factors Affecting Aggregate Demand?

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