What is the aggregated demand curve?

Aggregated demand curve is a macroeconomic concept that summarizes the overall demand for all goods or services in the economy. This concept usually focuses on finished goods because consumers buy these items primarily on the economic market. Aggregated demand can also represent the sum of all individual demand curves that play an integral role in the theory of supply and demand. This economic concept is shown on the right angle graphics chart, while the vertical axis representing the prices of the product and the horizontal axis containing information on the total number of goods or services that the company sells for different price points. The demand curve begins in the upper left corner and slopes down to the right lower chart. The menu curve starts in the upper corner of the upper corner and the slopes downwards towards the knee in the left graph. The intersection point represents the equilibrium point. This chart represents an offer and demand at the level of microeconomic or individual products.

Aggregated demand curve helps countries to measure their gross domestic product (GDP) by calculation, such as consumer price index (CPI). The consumer price index is the average price of goods or services commonly used in households. Because the aggregated demand curve represents the "average" demand for all goods on the basis of GDP, CPI is the average price that represents information about the vertical axis of the aggregated supply of supply and demand. In short, the CPI calculates the weighted average price for goods such as food, housing, clothing and the like necessary expenditure. Higher average prices for these goods will shift equilibrium points above to the aggregated demand curve, denoting less goods, will be sold on the overall economic market.

rather than movements up and down the aggregated demand curve in relation to the average consumer index, the entire demand curve can move left or right on the chart of supply and demand. This occursWhen the customer's preferences are changed for goods or services, substitute goods or services enter the market that offer better value for consumers, or increases the total consumer intake. Monetary and fiscal policy can play an important role in moving the aggregated demand curve. Higher taxes and inflation can move the entire curve to the left and reduce the overall demand in the economy based on lower income. The opposite occurs in the light of lower taxes and inflation, which shifts the demand curve to the right.