Aggregate demand is aggregate expenditure in an economy during a period of time. In a two sector economic model which consists of household sector (H/H) and the firm sector, components of aggregate demand are (I) aggregate consumption expenditure and (ii) aggregate investment expenditure.
So, AD = C+I.
Aggregate supply in an economy indicates money value of all final goods and services that is being produced in that economy during a given period of time, which is also the aggregate income of the nation.
So, AS = NI = Y ( Y stands for NI in Macro economics)
Both AD and AS start from Y axis. While AS curve starts from the point of original, AD curve starts from any point above that on the Y axis.
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