ECON 1010 Lecture : Aggregate Demand .docx

• School: University of Manitoba
• Department: Economics
• Course: ECON 1010
• Professor: Sarrah Vakili

Document Summary

The identity for calculating aggregate demand (ad) is as follows: Ad = c + i + g + (x-m) C: consumers" expenditure on goods and services: this includes demand for consumer durables (e. g. washing machines, audio-visual equipment and motor vehicles & non-durable goods such as food and drinks which are consumed and must be re-purchased). Household spending accounts for over sixty five per cent of aggregate demand in the uk. I: capital investment this is investment spending by companies on capital goods such as new plant and equipment and buildings. Investment also includes spending on working capital such as stocks of finished goods and work in progress. G: government spending this is government spending on state-provided goods and services including public and merit goods. Decisions on how much the government will spend each year are affected by developments in the economy and also the changing political priorities of the government.