Explore commonly used personal finance terms.
Aggregate demand is the total amount of goods and services demanded across an economy at a given overall price level and in a specified time period. It comprises consumption, investment, government spending, and net exports. Aggregate demand reflects the spending behavior of households, businesses, and governments, providing insights into economic health. When aggregate demand is high, it drives economic growth, while a decrease may signal a downturn, influencing inflation, unemployment, and monetary policy decisions.
