Q. 225.0( 1 Vote )

What is aggregate

Answer :

The value of final goods and services which all the sectors in an economy are planning to buy in a year is called the aggregate demand.

It has 4 components, namely:

a)Private final consumption expenditure

b) Government final consumption expenditure

c) Investment expenditure

d) Net exports


Controlling the money is helpful to reduce the excess demand in the following ways:

● With the reduction in money supply, the amount of money left with people to make purchases of goods and services will reduce.

● This will reduce aggregate demand.

● Thus, the excess demand would be wiped out.

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