What is an aggregate demand and economic growth?

Economic growth means an increase in real GDP. Economic growth means there is an increase in national output and national income. Economic growth is caused by two main factors: an increase in aggregate demand (AD); an increase in aggregate supply (productive capacity). read more

Aggregate demand Aggregate demand (AD) is the total demand for goods and services produced within the economy over a period of time. Aggregate demand (AD) is composed of various components. read more

Demand-side causes. In the short term, economic growth is caused by an increase in aggregate demand (AD). If there is spare capacity in the economy then an increase in AD will cause a higher level of real GDP. read more