Question

Aggregate demand refers to ______.

Options

• total amount of goods and services demanded in the economy

• it shows the desired or planned demand

• it is positively related to income

• all of these

Answer 1

Aggregate demand refers to total amount of goods and services demanded in the economy, it shows the desired or planned demand and it is positively related to income.

Explanation:

Aggregate demand is the total amount of goods and services demanded in the economy. It refers to the desired, intended or planned (‘ex ante,’ which means ‘beforehand’) demand or spending by the people, i.e., the total amount of goods and services they would like to purchase.