What does aggregate demand represent in an economy?

Aggregate demand represents the total quantity of goods and services demanded across all levels of an economy at a given overall price level and in a specified time period. It encompasses consumption by households, investment by businesses, government spending, and net exports (exports minus imports). This concept is crucial in understanding how various factors, such as changes in consumer confidence or fiscal policy, can influence overall economic activity.

In contrast, the total quantity of goods and services produced pertains to aggregate supply, which reflects the overall production capability of the economy rather than demand. The total quantity of money in circulation is more aligned with monetary factors influencing demand but does not directly describe what aggregate demand itself is. Lastly, while exports and imports are components that affect net demand in the context of an open economy, they do not encapsulate the entirety of aggregate demand, which includes all domestic and foreign consumption behaviors.