class-12th
Chapter-7
AGGREGATE
DEMAND & RELATED
CONCEPTS
,AGGREGATE DEMAN
Aggregate demand (AD) refers to the total value of
final goods and services which all the sectors of an
economy are planning to buy at a given level of
income during a period of one accounting year.
AD is the aggregate expenditure that different
sectors of the economy are willing to incur during a
given period.
It is important to note that aggregate expenditure
refers to the planned expenditure and not the actual
expenditure.
,PRIVATE (HOUSEHOLD) INVESTMENT EXPENDIT
CONSUMPTION EXPENDITURE (C) : It refers to the total expend
It refers to the total expenditure goods. It includes an additio
incurred by households on the purchase such as machinery, building
of goods and services during an simplicity, it is assumed in o
accounting year. autonomous, i.e. investmen
GOVERNMENT EXPENDITURE (G) NET EX
It refers to the total expenditure incurred by the Exports
government on consumer goods and capital goods to satisfy within
the common needs of the economy. It means, government rest of
incurs consumption expenditure as well as investment the res
expenditure. been pr
A.Consumption Expenditure is incurred to meet public needs exports
like law and order, education, health, transport, defense, etc.
, COMPONENTS OF Compone
Constitue
AGGREGATE DEMAND
01 Private Consumption Expenditure
02 Investment Expenditure (I)
03 Government Expenditure (G)
04 Net Exports (Exports - Imports) (X – M)
Chapter-7
AGGREGATE
DEMAND & RELATED
CONCEPTS
,AGGREGATE DEMAN
Aggregate demand (AD) refers to the total value of
final goods and services which all the sectors of an
economy are planning to buy at a given level of
income during a period of one accounting year.
AD is the aggregate expenditure that different
sectors of the economy are willing to incur during a
given period.
It is important to note that aggregate expenditure
refers to the planned expenditure and not the actual
expenditure.
,PRIVATE (HOUSEHOLD) INVESTMENT EXPENDIT
CONSUMPTION EXPENDITURE (C) : It refers to the total expend
It refers to the total expenditure goods. It includes an additio
incurred by households on the purchase such as machinery, building
of goods and services during an simplicity, it is assumed in o
accounting year. autonomous, i.e. investmen
GOVERNMENT EXPENDITURE (G) NET EX
It refers to the total expenditure incurred by the Exports
government on consumer goods and capital goods to satisfy within
the common needs of the economy. It means, government rest of
incurs consumption expenditure as well as investment the res
expenditure. been pr
A.Consumption Expenditure is incurred to meet public needs exports
like law and order, education, health, transport, defense, etc.
, COMPONENTS OF Compone
Constitue
AGGREGATE DEMAND
01 Private Consumption Expenditure
02 Investment Expenditure (I)
03 Government Expenditure (G)
04 Net Exports (Exports - Imports) (X – M)
