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SAI INTERNATIONAL SCHOOL

ECONOMICS

Class-XII

CHAPTER 7

Aggregate demand and related concepts

(Module- 39)

TOPICS TO BE COVERED-

-Meaning of aggregate demand.

-components of aggregate demand

-Aggregate demand in a four and two sector model

Concept of investment autonomous and induced

-Meaning of aggregate supply

Meaning of Aggregate demand: -

Aggregate demand refers to money value of all the final goods and

services which all the sectors (primary, secondary and tertiary) of an economy
are planning to by at a given level of income during a period of one accounting
year.

Components of aggregate Demand: -

1. Private (household) consumption expenditure. (c)

2. Government expenditure. (G)
3. Investment Expenditure. (I)
4. Net exports. X – M)

• Private (household) consumption expenditure. (c)

It refers to the total expenditure incurred by the household sector on
purchase of goods and services during an accounting year.