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Economics vocabulary · GDP and Growth

Aggregate demand

Meaning in economics, with examples

nounCommon term

In economics, aggregate demand means: The total spending on goods and services in an economy at a given price level: consumption, investment, government spending and net exports added together.

In Turkish: toplam talep

How it is used

A core idea in macroeconomics, often written AD and drawn with aggregate supply (AS) in the AD-AS model. Fiscal and monetary policy try to boost or cool aggregate demand. As a formula: AD = C + I + G + (X − M).

Example sentences

  1. Tax cuts are meant to boost aggregate demand during a recession.

  2. When aggregate demand grows faster than supply, prices tend to rise.

Common collocations

  • boost aggregate demand
  • weak aggregate demand
  • aggregate demand and supply
  • AD curve
  • demandThe amount of a good or service that buyers are willing and able to purchase at each possible price during a given period.
  • consumptionThe spending of households on goods and services such as food, clothes, rent and transport; it is usually the largest part of a country's GDP.
  • investmentSpending on things that will be used to produce more in the future, such as machines, buildings and software; in GDP data it does not include buying shares.
  • government spendingMoney that the state spends on public services, investment, salaries and social payments such as pensions; a key tool of fiscal policy.
  • demand-pull inflationInflation that happens when total demand in the economy grows faster than the supply of goods and services, often summed up as too much money chasing too few goods.

More terms: GDP and Growth

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This page explains English vocabulary for learners. It is not financial advice.