What economic concept describes the total demand for goods and services in the economy?

The concept that describes the total demand for goods and services in an economy is known as aggregate demand. Aggregate demand represents the overall demand for all goods and services at various price levels within a given time period. It is typically illustrated by the aggregate demand curve, which shows the relationship between the price level and the quantity of output demanded.

Aggregate demand is composed of several components, including consumer spending, business investments, government spending, and net exports (exports minus imports). Understanding aggregate demand is crucial for analyzing economic fluctuations, as changes in demand can impact everything from production levels to employment rates and overall economic growth.

In contrast, aggregate supply refers to the total supply of goods and services that producers in an economy are willing and able to sell at a given price level. Economic equilibrium is the point where aggregate demand equals aggregate supply, leading to a stable economic situation. Supply chain management pertains to the logistics and operations related to the production and distribution of goods, which, while important for understanding market functioning, does not directly pertain to overall demand in the economy.