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aggregate demand
This term is a technical pillar of macroeconomics, used primarily in formal academic, governmental, and financial contexts. It describes the holistic appetite for spending within an entire economy rather than the desire for a specific product. Because it encompasses four distinct sectors—households, businesses, government, and net exports—it is used by policymakers to justify interventions like adjusting interest rates or tax laws.
In professional discourse, it is often contrasted with aggregate supply. While "demand" in a general sense might refer to a single market, "aggregate demand" specifically signals a systemic, economy-wide measurement. It is almost exclusively used as a singular concept in economic modeling.
Meanings
Examples
The government implemented a stimulus package to boost aggregate demand during the recession.
If aggregate demand exceeds aggregate supply, prices will likely rise.
I wonder if the recent tax cuts will actually increase aggregate demand in the long run.
A sudden drop in consumer confidence can lead to a sharp decline in aggregate demand.
The professor explained how the aggregate demand curve shifts to the right when investment increases.
The professor explained how the aggregate demand curve shifts to the right when investment increases.
We need to analyze the components of aggregate demand to understand the current economic slump.
High interest rates typically dampen aggregate demand by making borrowing more expensive.
The central bank is trying to manage aggregate demand to keep inflation within the target range.