Aggregate Demand (AD)

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Last updated 8:19 AM on 8/17/25
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4 Terms

1
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Define aggregate demand.

Total spending on final goods/services: AD = C + I + G1 + G2 + (X – M).

2
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Why is AD important?

Drives short-term economic growth by stimulating production, jobs, and living standards.

3
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Name one factor affecting each AD component.

C → disposable income; I → business confidence; G → budget decisions; (X – M) → exchange rate, overseas growth.

4
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