Question

"the aggregate demand curve is the sum of all demand curves of all goods and services in the economy"

Answer 1

Answer:

A. True

Explanation:

Aggregate demand refers to the desire and the will to purchase a specified quantity of all the final goods and services produced in a country at a specific price level at different points of time.

An aggregate demand curve is downward sloping, implying increasing demand at lower price levels and decreasing demand at higher price levels.

Aggregate demand = Consumption (C) + Investment (I) + Government Expenditure (G) + Net Exports (NX) = GDP at market price

C represents the consumption goods demand by individuals and households.

I represents the private corporate spending on investments in fixed capital assets like plant and machinery and equipments etc.

G represents the government expenditure for the people like on building parks and dams etc and social assistance programmes.

NX represents the exports minus imports.

Hence, we can see that Aggregate Demand accounts for the measure of all the final goods and services produced domestically in a country and thus is the sum of all demand curves of all goods and services in the economy.