Which of the following is NOT a determinant of aggregate demand?

The correct answer is that market competition is not a determinant of aggregate demand. Aggregate demand refers to the total quantity of goods and services demanded across all levels of the economy at a given overall price level and in a given period. It is influenced by several key components including consumer spending, investment spending, and government expenditure.

Consumer spending is a primary component of aggregate demand, reflecting the total amount households consume and how this varies with income levels. Investment spending also plays a critical role, as increases or decreases in business investments can significantly impact overall demand in the economy. Government expenditure, including public spending on goods and services, directly adds to aggregate demand.

Market competition, however, primarily relates to the supply side of the economy. It influences how goods and services are produced and priced but does not directly affect the overall level of demand. Thus, it is not categorized as a determinant of aggregate demand. This distinction is essential for understanding how different economic factors contribute to overall demand in the economy.