Question

Explain the determinants of aggregate demand.

Answer 1

There are basically four determinants of aggregate demand:

1) Consumption

2) Investment

3) Government Expenditure

4) Net exports

Consumption includes the spending by the citizens on goods and Government expenditure includes all the spending of the government and Net exports include exports minus imports.  

Aggregate demand means the total demands for goods and services by the people of the country over a given period of time.