## Components of Aggregate Demand Solution

STEP 0: Pre-Calculation Summary
Formula Used
Components of Aggregate Demand = Private Consumption Expenditure+Investment Expenditure+Government Expenditure+Net Exports
This formula uses 5 Variables
Variables Used
Components of Aggregate Demand - Components of Aggregate Demand is the representation of the total demand for goods and services within an economy at a given price level and period of time.
Private Consumption Expenditure - Private Consumption Expenditure refers to the total spending of an individual or a household on the purchase of goods and services in an economy during an accounting year.
Investment Expenditure - Investment Expenditure refers to the company’s total expenditure on acquiring new capital goods and services in non-residential and residential structures.
Government Expenditure - Government Expenditure is the total expenditure made by the government on the acquisition of public goods and social services to satisfy the need of the overall economy.
Net Exports - Net Exports refers to the difference between the total export and total import of the country.
STEP 1: Convert Input(s) to Base Unit
Private Consumption Expenditure: 500 --> No Conversion Required
Investment Expenditure: 280 --> No Conversion Required
Government Expenditure: 400 --> No Conversion Required
Net Exports: 2500 --> No Conversion Required
STEP 2: Evaluate Formula
Substituting Input Values in Formula
AD = C+I+G+X M --> 500+280+400+2500
Evaluating ... ...
STEP 3: Convert Result to Output's Unit
3680 --> No Conversion Required
3680 <-- Components of Aggregate Demand
(Calculation completed in 00.004 seconds)
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IGNOU (IGNOU), India
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## < 19 Macroeconomics Calculators

Operating Surplus
Operating Surplus = Value of Output-Intermediate Consumption-Compensation of Employees-Mixed Income-Consumption of Fixed Capital-Net Indirect Taxes
Components of Aggregate Demand
Components of Aggregate Demand = Private Consumption Expenditure+Investment Expenditure+Government Expenditure+Net Exports
Real Effective Exchange Rate
Real Effective Exchange Rate = (Consumer Price Index of Domestic Nation*Nominal Effective Exchange Rate)/Consumer Price Index of Foreign Country
Net Factor Income from Abroad = Net Compensation of Employees+Net Income from Property and Entrepreneurship+Net Retained Earnings
National Disposable Income
National Disposable Income = National Income+Net Indirect Taxes+Net Current Transfers from the Rest of the World
Gross Domestic Product at Factor Cost
Gross Domestic Product at Factor Cost = Gross Domestic Product at Market Price+Subsidies-Indirect Taxes
Change in Money Supply
Change in Money Supply = (1/Required Reserve Ratio)*Change in Bank Reserves-(Initial Deposit Amount)
Personal Disposable Income
Personal Disposable Income = Personal Income-Personal Taxes-Miscellaneous Receipts of Government
Private Final Consumption Expenditure
Private Final Consumption Expenditure = Household Final Consumption Expenditure+Non Profit Private Institutions FCE
Gross National Product at Market Price
Gross National Product at Market Price = Gross Domestic Product at Factor Cost+Net Factor Income from Abroad
Net Domestic Product at Factor Cost
Net Domestic Product at Factor Cost = Net Domestic Product at Market Price-Net Indirect Taxes
Net Domestic Product at Market Price
Net Domestic Product at Market Price = Gross Domestic Product at Market Price-Depreciation
Growth Rate of Money Supply
Growth Rate of Money Supply = Rate of Inflation+Growth Rate of Real Gross Domestic Product
Real Gross Domestic Product Per Capita
Real Gross Domestic Product Per Capita = Real Gross Domestic Product/Total Population
Expenditure Multiplier
Expenditure Multiplier = Initial Consumer Price Index/Change in Government Spending
Gross National Disposable Income
Gross National Disposable Income = Net National Disposable Income+Depreciation
Velocity of Money
Velocity of Money = Nominal Gross Domestic Product/Money Supply
Real Wage
Real Wage = Nominal Wage/Consumer Price Index
Simple Deposit Multiplier
Simple Deposit Multiplier = 1/Required Reserve Ratio

## Components of Aggregate Demand Formula

Components of Aggregate Demand = Private Consumption Expenditure+Investment Expenditure+Government Expenditure+Net Exports

## What do you mean by Components of Aggregate Demand ?

Components of Aggregate Demand refers to the total demand of an economy. It also refers to a country’s Gross Domestic Product (GDP) demand. Aggregate demand is also known as Aggregate Expenditure (AE) as AE is the total expenditure incurred by all the sectors of the economy. The aggregate demand includes factors such as personal consumption, investment, government demand, and net exports. An economy’s aggregate demand increases when the variables’ sum increases. Aggregate Demand is not the same as Market Demand. The former is the total demand for goods and services in an economy; however, the latter is the demand for one commodity in the market.

## How to Calculate Components of Aggregate Demand?

Components of Aggregate Demand calculator uses Components of Aggregate Demand = Private Consumption Expenditure+Investment Expenditure+Government Expenditure+Net Exports to calculate the Components of Aggregate Demand, Components of Aggregate Demand refers to the total demand for finished goods and services in the economy over a specific time period. Components of Aggregate Demand is denoted by AD symbol.

How to calculate Components of Aggregate Demand using this online calculator? To use this online calculator for Components of Aggregate Demand, enter Private Consumption Expenditure (C), Investment Expenditure (I), Government Expenditure (G) & Net Exports (X M) and hit the calculate button. Here is how the Components of Aggregate Demand calculation can be explained with given input values -> 3680 = 500+280+400+2500.

### FAQ

What is Components of Aggregate Demand?
Components of Aggregate Demand refers to the total demand for finished goods and services in the economy over a specific time period and is represented as AD = C+I+G+X M or Components of Aggregate Demand = Private Consumption Expenditure+Investment Expenditure+Government Expenditure+Net Exports. Private Consumption Expenditure refers to the total spending of an individual or a household on the purchase of goods and services in an economy during an accounting year, Investment Expenditure refers to the company’s total expenditure on acquiring new capital goods and services in non-residential and residential structures, Government Expenditure is the total expenditure made by the government on the acquisition of public goods and social services to satisfy the need of the overall economy & Net Exports refers to the difference between the total export and total import of the country.
How to calculate Components of Aggregate Demand?
Components of Aggregate Demand refers to the total demand for finished goods and services in the economy over a specific time period is calculated using Components of Aggregate Demand = Private Consumption Expenditure+Investment Expenditure+Government Expenditure+Net Exports. To calculate Components of Aggregate Demand, you need Private Consumption Expenditure (C), Investment Expenditure (I), Government Expenditure (G) & Net Exports (X M). With our tool, you need to enter the respective value for Private Consumption Expenditure, Investment Expenditure, Government Expenditure & Net Exports and hit the calculate button. You can also select the units (if any) for Input(s) and the Output as well.
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