Aggregate Demand is defined as the total of all expenditures for goods and services of any nation or state economy. Friedrich Hayek, an Austrian economist, believed prosperity improves by the degree Aggregate Demand increases as a result of consumer demands of the people. He taught that the people could only increase aggregate demand if they owned private property which provided a means for private production, the creation of self employment and employment for others to be divided among all people which in turn created more demand for goods and services. He was proven correct when a dramatic increase in the number of home mortgages on new homes established a major home building industry in United States after World War II and the people created enormous consumer demands when the funds from financing new homes spread throughout the economy.
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