A country's aggregate demand

Greetings colleagues back with more content of the economic world, for this opportunity I bring you the aggregate demand of a nation and its importance to an economy, as it represents much of GDP at the macro level in reference to global level of goods and services demanded in the economy, public spending imports, exports, as pillars of economic activity.

What represents the aggregate demand, shows us the sum of goods and services that consumers, as well as companies, and the role of the state are willing to buy at a certain price level, so it is reflected in GDP, also either domestic or foreign, because there are investors as suppliers who are foreign but are residents in the country.

Aggregate demand also reflects public spending or spending by the state to buy goods and services to offer the population, on the other hand we have that net exports, which depend on production and domestic prices, as foreigners, but the price depends on the exchange rate or the legal rate, which is why aggregate demand has a domestic demand and another external demand, the latter is referred to as net exports.

We have already seen the importance of knowing the aggregate demand because it shows us the role of the state, how the economy moves according to the goods and services of global form, the investment that the state makes to buy it which represents the consumption made by the families, that is why it represents the form of a total expense in which the commercial agents that intervene in a country or region, as well as the foreigners and residents in the country the traders, participate public and private sector.

DA = C + I + G + (X-M)

This is the equation for calculating aggregate demand where c is household consumption, I is investment, G is public and private spending, and finally (X-M) x export minus imports.