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What is the difference between aggregate expenditure and aggregate demand?

Economics

What is the difference between aggregate expenditure and aggregate demand?

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Both aggregate demand and aggregate expenditure consider consumption spending, investment spending, government expenditure and net exports (exports-imports) in their calculation. However, they are different from one another.

Aggregate expenditure considers prices to be constant and relates the total spending to the real GDP produced in the economy. Out of the four main components which comprise the aggregate expenditure, consumption spending is the one which directly depends upon the income level of a person. Therefore, a change in the income leads to a movement in the aggregate expenditure curve. With a change in price level, which is assumed constant here, the aggregate expenditure curve shifts either leftward or rightward.

Aggregate demand, on the other hand, portrays the relationship between the level of real GDP and the price level prevailing in the economy, ceteris paribus. Therefore, a change in the price level causes a movement along the aggregate demand curve. With a change in income, which is assumed constant here, the aggregate demand curve shifts either leftward or rightward.