What is meant by aggregate demand ? State its components.

1.	What is meant by aggregate demand ? State its components.
Answer» Aggregate Demand refers to the value of final goods and services which all sectors of an economy are planning to buy during a year. Components : (a) Private consumption expenditure (b) Government consumption expenditure (c) Investment expenditure (d) Net Exports Aggregate Demand implies the total demand of final goods and services by all the people in an economy. It expresses the total demand in terms of money. In this manner, it can be defined as the actual aggregate expenditure incurred by all the people in an economy on different goods and services.

Answer»

Aggregate Demand refers to the value of final goods and services which all sectors of an economy are planning to buy during a year.

Components :

(a) Private consumption expenditure

(b) Government consumption expenditure

(d) Net Exports

Aggregate Demand implies the total demand of final goods and services by all the people in an economy. It expresses the total demand in terms of money. In this manner, it can be defined as the actual aggregate expenditure incurred by all the people in an economy on different goods and services.

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