State components of AD. Describe anyone of them.
or
What determines the level of household consumption? 
or
How does AD affect the level of income in an economy?

Components. Briefly AD consists of planned spending (i) by households on consumption, (it) by firms on investment goods, (iii) by govt, on purchase of goods and services and (iv) Net exports. The main components of aggregate demand (aggregate expenditure) in a four-sector economy are:
1.    Private (household) consumption demand (C)
2.    Private investment demand (I)
3.    Government demand for goods and services. (G)
4.    Net export demand (X – M)
So that AD = C + I + G + (X – M)
Mind, all these variables represent planned (ex-ante) demand and not actual.
1.    Household (or Private) Consumption Demand (C). It is the most important part of aggregate demand for output of an economy. This refers to ex-ante (planned) consumption expenditure to be incurred by all households on purchase of goods and services for their personal consumption. For instance, household demand for food, clothing, housing, books, furniture, cycles, radio, T.V. sets, educational and medical services will be called household consumption demand. The level of household consumption depends directly upon the level of households' disposable income (Personal income - Personal taxes). Consumption (C) is a function of income (Y). Symbolically: C = f(Y).
2.    Private Investment Demand (I). This refers to planned (ex-ante) expenditure on creation of new capital assets (like machines, buildings) and inventories (like raw materials) by private entrepreneurs. Beware, investment in Keynesian sense does not imply purchase of existing shares or securities but means expenditure on creation of new capital assets such as buildings, plants and equipment, inventories, transport, roads, etc. that help in production. Investment is undertaken not only to maintain present level of production but also to increase productive capacity in future. An economy grows through investment. For simplicity sake in our study investment expenditure is assumed to be autonomous investment. 
Induced investment and autonomous investment. Investment undertaken with the motive of earning profit is called induced investment whereas investment made without profit motive (e.g., by govt, on construction of roads) is termed as autonomous investment. 
3. Government Demand for Goods and Services (G). It refers to government planned (ex–ante) expenditure on purchase of consumer and capital goods. The present day states are by and large welfare states wherein government participation in economic welfare of the people has increased manifold. Government demand may be for satisfying public needs for roads, schools, hospitals, water works, railway transport or for infrastructure (like roads, bridges, airports), maintenance of law and order and defence from external aggression. Investment can be induced and autonomous. It needs to be noted whereas investment in private sector is made with profit motive and, therefore, called induced investment, government investment is guided by people's welfare motive and, therefore, called autonomous investment.
4. Net Exports (Export–Imports) Demand. Net export is the difference between export of goods and services and import of goods and services during a given period. Net export reflect the demand of foreign countries for our goods and services. Thus, net exports show expected (ex-ante) net foreign demand. This strengthens the income, output and employment process of our economy. As against this, imports from abroad drives out the earning of the economy, and therefore, they do not encourage domestic output and employment.
In sum, aggregate demand is the sum of the above-mentioned four types of demand (expenditure), i.e., AP = C + I + G + (X – M). Since determination of income (output) and employment is to be studied in the context of a two-sector (Household and Firm — assuming no govt, and foreign trade) economy, we shall include in aggregate demand (AD) only two components of demand such as consumption demand (C) and investment demand (I). Put in symbols;

Fig.(a)
AD = C + I
This has been depicted in Fig.(a). Aggregate demand curve has been shown as vertical sum of consumption (C) curve and investment (I) curve.
Following are noteworthy points of the diagram:
(i) AD curve is positive sloping line which means when income increases, AD (expenditure) also increases.
(ii)    AD curve does not originate at point O which shows that even at zero level of income, some minimum level of consumption (equal to OR in the Fig.(a)) is essential for survival.
(iii)    Investment curve is a straight line parallel to X-axis because according to Keynes, level of investment remains constant at all levels of income during short period.
Effect of change in AD on level of income. If there is unemployment in an economy, an increase in AD will lead to an increase in level of income whereas a fall in AD will result in fall in level of income. But if economy is in a state of full employment (of resources), a rise in AD will not increase production level and income level. However, price will go up.