What effects aggregate demand and how would it effect the price level of the economy?

Aggregate demand is the total demand in the economy. It is calculated as C+I+G+(X-M), where C is consumption, I is investment, G is government spending, X is exports and M is imports. The value of all is calculated to determine the total aggregate demand in the economy. If there is a rise in Consumption then aggregate demand will increase and shift outwards, causing a rise in the price level and increase in real GDP.

JT
Answered by James T. Economics tutor

2108 Views

See similar Economics A Level tutors

Related Economics A Level answers

All answers ▸

In the early 2010s the mobile phone company Orange merged with another mobile Network firm, T Mobile, in order to a form a new company called EE. Explain what type of merger this is and discuss some of the possible costs and benefits of this merger.


How do you calculate Price Elasticity of Demand


Evaluate the likely effects of fluctuations in sugar prices on a sweet company.


A firm's long run total cost curve is given by TC(Q) = 1000Q - 30Q^2 + Q^3. Derive the expression for the long run average cost curve and sketch it. At what quantity is the minimum efficient scale?


We're here to help

contact us iconContact ustelephone icon+44 (0) 203 773 6020
Facebook logoInstagram logoLinkedIn logo

MyTutor is part of the IXL family of brands:

© 2026 by IXL Learning