2min chapter

Think Like An Economist cover image

S E35: Connecting Interest Rates & Output

Think Like An Economist

CHAPTER

How Do Economists Measure Demand?

John maynard kanes was the economist who pointed out that even if supply determines the economies long run potential, the short run ups and downs of the economy likely reflect shifts in demand. In this story, demand, or the amount of stuff that people want to buy, is a big deal. How do economists measure and think about this? The ky idea is what economists call aggregate expenditure. Aggregate expenditure is really the sum of spending across the entire economy.

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