Author(s): Yajuan Lange
Aggregate demand, a central concept in macroeconomics, represents the total demand for goods and services within an economy at a given price level and time period. This paper delves into the intricacies of aggregate demand, exploring its key drivers and implications for economic performance. Through a comprehensive analysis, we examine the factors influencing aggregate demand, including consumer spending, investment, government expenditures, and net exports. Moreover, we investigate the implications of shifts in aggregate demand for output, employment, inflation, and overall macroeconomic stability. By shedding light on the drivers and implications of aggregate demand, this study aims to provide insights into the dynamics of economic activity and inform policymakers' decisions in managing demand-side factors to achieve macroeconomic objectives.