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Aggregate Demand and Supply Model
Economics (Year 12)
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
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