Aggregate Demand
Aggregate demand is an economic term that refers to the total amount of goods and services that consumers, businesses, and government entities are willing and able to purchase in a given period of time. It is calculated by adding together consumer spending, business investment, government spending, and net exports. Aggregate demand is an important concept in macroeconomics, as it is used to measure the overall health of an economy and to determine the level of economic activity.
History of Aggregate Demand
The concept of aggregate demand was first developed by British economist John Maynard Keynes in the 1930s. Keynes argued that aggregate demand was the primary driver of economic activity, and that changes in aggregate demand could lead to changes in economic output. He also argued that aggregate demand could be influenced by government policies, such as fiscal and monetary policy. Since then, aggregate demand has become an important tool for economists to measure the health of an economy.
Comparison of Aggregate Demand
| Year | Aggregate Demand |
|---|---|
| 2020 | $20 trillion |
| 2021 | $21 trillion |
| 2022 | $22 trillion |
Summary
Aggregate demand is an important concept in macroeconomics, as it is used to measure the overall health of an economy and to determine the level of economic activity. It is calculated by adding together consumer spending, business investment, government spending, and net exports. For more information on aggregate demand, you can visit the websites of the Federal Reserve Bank of St. Louis, the International Monetary Fund, and the World Bank.
See Also
- Gross Domestic Product (GDP)
- Consumer Price Index (CPI)
- Monetary Policy
- Fiscal Policy
- Inflation
- Unemployment
- Interest Rates
- Exchange Rates
- Balance of Payments
- Business Cycle
