Aggregate Demand (AD)

Question 1

What is Aggregate Demand (AD)?

Answer 1

Total spending on goods and services in an economy.

Question 2

What is the formula for Aggregate Demand (AD)?

Answer 2

AD = C + I + G + (X - M)

Where: - C = Consumption - I = Investment - G = Government spending - X = Exports - M = Imports

Question 3

What can cause shifts in Aggregate Demand (AD)?

Answer 3

Changes in consumption, investment, government spending, exports, or imports.

Question 4

What are some influencing factors of Aggregate Demand (AD)?

Answer 4

Interest rates, consumer confidence, exchange rates, fiscal policy.