Meaning & use
aggregate demand
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Meaning
noununcountablefinance
The total amount of goods and services that everyone in an economy wants to buy at a given overall price level.
Grammar: Uncountable: aggregate demand rose.
Patterns
- a fall in aggregate demand
- aggregate demand for something
A fall in aggregate demand can lead to higher unemployment.
Tax cuts are meant to boost aggregate demand.
Economists expect aggregate demand to recover next year.
Common combinations
- boost aggregate demand
- The government spent heavily to boost aggregate demand.
- a fall in aggregate demand
- A fall in aggregate demand left many shops empty.
- weak aggregate demand
- Weak aggregate demand slowed hiring across the country.
- aggregate demand curve
- The aggregate demand curve slopes downward.
- increase aggregate demand
- Lower interest rates increase aggregate demand.
Synonyms and how they differ
- total demand
- Total demand is a plain description, while aggregate demand is the technical term used by economists.
- overall demand
- Overall demand is looser and may refer to one market, whereas aggregate demand covers the whole economy.
- market demand
- Market demand covers demand for one product, not the whole economy.
Opposites
Word family
- aggregate noun
- a total made up of many parts
- aggregate verb
- to collect or combine into a total
- aggregation noun
- the process of gathering into a whole
- demand noun
- the desire and ability to buy goods
Commonly confused: aggregate demand or aggregate supply?
aggregate demand vs aggregate supply
Aggregate supply is the total output firms produce, while aggregate demand is the total buyers want.
Practice
A sudden drop in consumer spending is likely to cause a fall in ___.
Choose one answer.
Total spending in the economy is aggregate demand. Aggregate supply refers to what firms produce, so it is not directly measured by spending.
Make it your own
Write a sentence using “aggregate demand”, then check it and compare it with the examples above.