ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Aggregate demand is a concept of macroeconomics that represents the total demand within an economy for all kinds of goods and services at a certain price point. In the long term, aggregate demand is indistinguishable from GDP.

Detailed explanation-2: -Aggregate Demand is the total quantity of all goods and services consumed in an economy at all possible price levels at a given time. The words total and price levels are important here. You can see on Graph 28-1 what appears to be a supply and demand graph.

Detailed explanation-3: -Aggregate demand is the amount of total spending on domestic goods and services in an economy. The downward-sloping aggregate demand curve shows the relationship between the price level for outputs and the quantity of total spending in the economy.

Detailed explanation-4: -The aggregate price level is a measure of the overall level of prices in the economy. To measure the aggregate price level, economists calculate the cost of purchasing a market basket. A price index is the ratio of the current cost of that market basket to the cost in a base year, multiplied by 100.

Detailed explanation-5: -The primary difference between aggregate demand and demand is that the former explains the total demand for goods and services produced by an economy. Demand describes the market for a specific product. Aggregate demand is a function of the individual market for every product in a marketplace.