Aggregate demand

The aggregate demand (also aggregate demand, aggregate demand ) is expressed on a whole economy aggregate of buyers in the market demand for goods. The aggregate demand is derived depending on the model approach of the total demand for domestic goods or from the entire demand for goods of nationals. In addition to goods are subsumed under the concept of goods and services.

Elements

In a closed economy does the aggregate demand of the residents of the sum of demand for consumer goods (C ), demand for investment goods (I) and government spending (G). C and I include the private freight demands. The government investment are attributed to G. In an open economy nor the exports ( EX) are added to the demand for goods. The imports are numbered among the supply of goods. The export surplus corresponds to the exports (EX) minus imports of goods (IM) of goods and services.

From the national point of view is therefore considered aggregate demand:

The two sizes consumption and gross investment is domestic demand, exports, foreign demand ( export demand ). If we subtract the aggregate demand (N), imports from, the gross domestic product at market prices gives (BIPM ).

Aggregate demand and Market Equilibrium

In the economic modeling of the demand for goods the supply of goods quantity is equated, that is, it is postulated, a goods market equilibrium in a first simple model. However then have to temporal shifts in income by saving, as well as the capital injections and outflows are considered by residents and nonresidents. Price and capital effects such as inflation, deflation and money illusion should be in the further discussion also considered.