Define: Aggregate Demand Curve

UK Accounting Glossary

Definition: Aggregate Demand Curve



Advertisement



Full Definition of Aggregate Demand Curve


The aggregate demand curve is a concept from neoclassical microeconomics that symbolizes the total demand for goods and services from all participants in an economy. A line sloping downward from left to right represents the aggregate demand curve, and each point on the aggregate demand curve represents a specific level of demand at a specific price. The slope of the aggregate demand curve line indicates that demand for goods and services increases as prices decrease. A number of factors, such as real interest rates, affect the position of the aggregate demand curve. For example, if real interest rates increase, the aggregate demand curve will shift upward and to the left because higher rates make capital goods more expensive. Similarly, a reduction in interest rates will move the aggregate demand curve downward and to the right, because lower rates make capital goods less expensive. Changes in economic growth expectations, total wealth, currency exchange rates, and inflation expectations will also move the aggregate demand curve to the right or left, depending on whether the changes give consumers more purchasing power or less.


Advertisement




Cite Term


To help you cite our definitions in your bibliography, here is the proper citation layout for the three major formatting styles, with all of the relevant information filled in.

Page URL
https://payrollheaven.com/define/aggregate-demand-curve/
Modern Language Association (MLA):
Aggregate Demand Curve. PayrollHeaven.com. Payroll & Accounting Heaven Ltd. February 19, 2020 https://payrollheaven.com/define/aggregate-demand-curve/.
Chicago Manual of Style (CMS):
Aggregate Demand Curve. PayrollHeaven.com. Payroll & Accounting Heaven Ltd. https://payrollheaven.com/define/aggregate-demand-curve/ (accessed: February 19, 2020).
American Psychological Association (APA):
Aggregate Demand Curve. PayrollHeaven.com. Retrieved February 19, 2020, from PayrollHeaven.com website: https://payrollheaven.com/define/aggregate-demand-curve/

Definition Sources


Definitions for Aggregate Demand Curve are sourced/syndicated and enhanced from:

  • A Dictionary of Economics (Oxford Quick Reference)
  • BusinessDictionary.com
  • Oxford Dictionary Of Accounting
  • Oxford Dictionary Of Business & Management

This glossary post was last updated: 4th February 2020.