Aggregate demand
Total planned spending on an economy's output at each price level: consumption, investment, government spending and net exports. It shifts with wealth, expectations, policy and foreign demand.
Where you will meet it
Aggregate demand appears in 2 learning outcomes on the CFA syllabus. A few of them:
- Set out what fiscal policy aims to do and the tools it uses
“Fiscal policy uses government spending and taxation to influence aggregate demand.”
- Explain how fiscal and monetary policy work together or against each other
“Monetary and fiscal policy act on aggregate demand together, so their combination matters as much as either alone.”
Practise it
Practise aggregate demand until it is automatic: questions that explain every wrong option.
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