What is the best way to describe aggregate demand?
A) quantity required to satisfy equilibrium
B) exports decrease; imports increase
C) amount of a country's goods and services demanded by households and firms throughout the world
D) individual's demand
E) domestic demand of foreign imports.

Question

Quizplus · Accepted Answer

Aggregate demand refers to the amount of goods and services demanded by households and firms not only domestically, but also throughout the world. It takes into account both domestic and foreign demand for a country's products.

Answer: A
 Aggregate demand is the total amount of goods and services demanded in an economy at a given price level. At equilibrium, the aggregate demand equals the aggregate supply, meaning that the desired quantity of goods and services is satisfied at a given price level.

The other choices do not accurately describe aggregate demand. B describes the trade balance of a country, D describes individual demand, and E describes the demand for foreign imports within a country.

What Is the Best Way to Describe Aggregate Demand