Aggregate activity and demand: Four components of aggregate demand

5.1 Four components of aggregate demand: Consumption, investment, government spending, net exports

Activities

Principles of Macroeconomics: "Chapter 13: Consumption and the Aggregate Expenditures Model"

• Read this chapter and attempt the "Try It" exercises. This chapter will show you how the aggregate demand curve can be derived from the aggregate expenditures model. Note that aggregate expenditures relate to the summation of planned levels of spending by consumers, businesses, government agencies, and global trade partners at a given price level. Notice also how the slope of the aggregate expenditures curve relates to the multiplier.