Aggregate Demand- Macro Topic 3.1

Mr. Clifford introduces aggregate demand, explaining it as the total demand for all goods and services in an economy. He discusses the components of GDP that make up aggregate demand: consumer spending, investment, government spending, and net exports. The video explains the downward-sloping aggregate demand curve, influenced by the wealth and interest rate effects. It also covers factors that can shift the aggregate demand curve, such as changes in the stock market, government spending, consumer confidence, and international trade.

What does the term 'aggregate' mean in the context of aggregate demand?

List the four components of GDP that make up aggregate demand.

Explain the wealth effect and how it influences aggregate demand.

What happens to aggregate demand when there is a decrease in government spending?

How does an increase in the incomes of trading partners affect our aggregate demand?