What is the difference between aggregate demand and aggregate supply?

What is the difference between aggregate demand and aggregate supply Introduction: The Macro View Hello everyone, and welcome to our video on the difference between aggregate demand and aggregate supply. When we talk about the overall performance of an economy, these two concepts play a crucial role. Let's dive in! Defining Aggregate Demand Aggregate demand, often abbreviated as AD, represents the total demand for goods and services in an economy at a given price level and time. It encompasses the spending of all economic agents, including households, businesses, and the government. AD is influenced by factors such as consumer spending, investment, government expenditure, and net exports. Understanding the Aggregate Demand Curve The aggregate demand curve shows the relationship between the overall price level in an economy and the total quantity of goods and services demanded. It has a downward slope, indicating that as the price level increases, the quantity demanded decreases. This inverse relationship is primarily due to the wealth effect, interest rate effect, and international trade effect. Aggregate Supply: The Production Side While aggregate demand focuses on the demand side of the economy, aggregate supply (AS) looks at the production side. AS represents the total quantity of goods and services that all industries are willing and able to supply at a given price level and time. It considers factors such as input costs, technology, and the overall productive capacity of the economy. The Aggregate Supply Curve