MathLiveAggregate demand identity
Adds up total spending in an economy as consumption, investment, government purchases, and net exports. It is the standard expenditure formula for aggregate demand in macroeconomic models.
AD = C + I + G + (X - M)What the symbols mean
| aggregate demand, total planned spending on domestic goods and services | |
| household consumption expenditure | |
| investment expenditure by firms and households | |
| government purchases of goods and services | |
| exports of goods and services | |
| imports of goods and services |
About this formula
- FieldEconomics and finance
- TopicMacroeconomics
- LevelUniversity
- Also calledaggregate demand formula, national income expenditure identity, total demand in an economy, components of aggregate demand, net exports in aggregate demand, expenditure approach GDP
- SourceWikidata Q1801078
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