MathLiveAggregate demand equation
Gives total planned spending on domestic output in an economy as the sum of consumption, investment, government purchases and net exports. It is used in macroeconomics to analyse output and the Keynesian cross.
AD = C + I + G + NXWhat the symbols mean
| Aggregate demand, total planned spending on final goods and services | |
| Household consumption expenditure | |
| Planned investment spending by firms | |
| Government purchases of goods and services | |
| Net exports, exports minus imports |
About this formula
- FieldEconomics and finance
- TopicMacroeconomics
- LevelUniversity
- Also calledaggregate demand formula, AD equation, total spending equation, expenditure approach GDP, C+I+G+NX, aggregate expenditure identity
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