Components of aggregate demand
What are the components of aggregate demand (AD)? Answer: The components of AD are as follows:AD = C + I + G + (X - M) By Simplifying AD = C + I, Here C refers to Household consumption demand and I refer to the Investment Demand.
What are the components of aggregate demand (AD)?
Answer: The components of AD are as follows:AD = C + I + G + (X - M) By Simplifying AD = C + I, Here C refers to Household consumption demand and I refer to the Investment Demand.
Equilibrium quantity: It is the quantity supplied and the quantity demanded at equilibrium price.
Definition of surplus: It is a condition in which quantity supplied is more than quantity demanded. To remove the surplus, producers will minimize the price till the market reaches to equilibrium.
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