ECONOMICS
AGGREGATE DEMAND
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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only the quantity of goods and services households want to buy.
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only the quantity of goods and services households and firms want to buy.
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only the quantity of goods and services households, firms, and the government want to buy.
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the quantity of goods and services households, firms, the government, and customers abroad want to buy.
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the quantity of goods households, firms, the government want to buy.
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Detailed explanation-1: -Aggregate demand is the sum of four components: consumption, investment, government spending, and net exports. Consumption can change for a number of reasons, including movements in income, taxes, expectations about future income, and changes in wealth levels.
Detailed explanation-2: -Aggregate demand takes the demand for every good produced by an economy and combines it into a single dollar amount. It includes the foreign demand for products produced domestically but excludes the domestic market for foreign-made items. Aggregate demand relates very closely to Gross Domestic Product (GDP).
Detailed explanation-3: -Aggregate demand is calculated as the sum of consumer spending, investment spending, government spending, and the difference between exports and imports. Whenever one of these factors changes and when aggregate supply remains constant, then there is a shift in aggregate demand.
Detailed explanation-4: -Market demand is the total quantity demanded by all consumers in a market for a given good.