Aggregate demand is an economic measurement of the total amount of demand for all finished goods and services produced in an economy. Aggregate demad is expressed as the total amount of money exchanged for those goods and services at a specific price level and point in time . It represent total demand for goods and services at any given price level in a given period. Aggregate demand over the long term equals to gross domestic products.

As, also known as total output, is the total supply of goods and services produced within an economy at a given overall price in a given period. It is represent by the aggregate supply curves, which describes the relationship between PRICE LEVELS and the quantity of output that firm are willing to provide . Typically there is a positive relationship between aggregate supply and the price level.

Aggregate demand is helpful in determining the overall strength and business in an economy. Since aggregate demand is measure by market values , it only represent total output at a given pricel level and doesnot necessarily represent quality or standard of living .

Higher economic growth lead to higher tax revenue and this enables tge goverment can spend more on public services, such as health care and education etc. This can enable higher living standard, such as increased life expectancy, higher rate of literacy and a greater understanding of civic and political issues . Countries with relatively high levels of economic growth and security are considered to have developed economies.If per capita gross domestic product is high but a country has poor infrastructure and income inequality. It would not be considered a developed economy.