Elements of AD?! (2 Viewers)

[SGSII]

Hey Guys
Could someone please help explain in easy and simple words the elements of AD for me?
I've read over it so many times and still don't understand it :S
Any help is good help
Thanks!

 

[RishBonjour]

Aggregate demand is just the total demand for goods and services in an economy.
So the elements must be all the different sources of demand in the economy. (equation in the syllabus summarises them--> AD= C + I + G + (X-M)

do you need someone to explain now each of those elements effect AD ? sorry, didn't fully understand your question :/

 

[SGSII]

Aggregate demand is just the total demand for goods and services in an economy.
So the elements must be all the different sources of demand in the economy. (equation in the syllabus summarises them--> AD= C + I + G + (X-M)

do you need someone to explain now each of those elements effect AD ? sorry, didn't fully understand your question :/

Okays thanks and yes please

 

[erckle999]

If you remember the 5 sector circular flow from year 11, you can use that to visualise AD. Think of demand as wanting to buy something from a firm, and therefore aggregate demand as the sum of everyone who wants to buy things (goods and services) from firms.
So, all the injections into the circular flow go to firms, so you can think of Gov spending (G), Investment (I), net exports (X - M) as all the money flowing to firms demanding goods. Also income spent my households goes to firms, so include Y.
That's how you get AD = Y + G + I + X - M.

Those respective parts are the elements of AD.

 

[SGSII]

If you remember the 5 sector circular flow from year 11, you can use that to visualise AD. Think of demand as wanting to buy something from a firm, and therefore aggregate demand as the sum of everyone who wants to buy things (goods and services) from firms.
So, all the injections into the circular flow go to firms, so you can think of Gov spending (G), Investment (I), net exports (X - M) as all the money flowing to firms demanding goods. Also income spent my households goes to firms, so include Y.
That's how you get AD = Y + G + I + X - M.

Those respective parts are the elements of AD.

Thank youu!