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Economics (MindTap Course List)

13th Edition
Roger A. Arnold
ISBN: 9781337617383

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Economics (MindTap Course List)

13th Edition
Roger A. Arnold
ISBN: 9781337617383
Textbook Problem

Is aggregate demand a specific dollar amount? For example, is it correct to say that aggregate demand is $9 trillion this year?

To determine

Explain that the aggregate demand is not the dollar amount.

Explanation

Aggregate demand is a sum of the total demand of the final goods and services demanded by the economy, or it is real GDP households that are willing to buy at a different level of price. Thus, aggregate demand does not represent the specific dollar amount.

In this case, it is not correct to say that $9 trillion is aggregate demand because the aggregate demand curve determines many points not just one.

Concept

Aggregate demand: Aggregate demand is a sum of the total demand of final goods and services demanded by economy as a whole for a particular period of time.

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