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What the AD function shows

What the AD function shows

AD diagram with average price level on the vertical axis, real GDP on the horizontal axis, a downward-sloping AD curve, an arrow showing movement down the curve, and left and right shifted AD curves

Aggregate demand is total planned spending on domestically produced goods and services at each possible average price level over a period. The AD function shows how the quantity of real output demanded changes when the average price level changes, holding other influences constant.

The AD function Lesson

  1. A Level
  2. /Economics
  3. /The AD function