Aggregate demand (AD)

Definition

Aggregate demand refers to the total amount of goods and services that all sectors in an economy are willing and able to purchase at different price levels during a given time period.

Related terms

Consumer spending: Consumer spending is the portion of aggregate demand that comes from individuals purchasing goods and services.

Investment spending: Investment spending refers to businesses' expenditures on capital goods such as machinery or buildings.

Government spending: Government spending represents the amount spent by federal, state, and local governments on public goods and services.