Aggregate demand is an economic indicator of the total amount of demand generated in an economy for all finished goods and services. At a given price level and point in time, aggregate demand is expressed as the cumulative amount of money traded for certain goods and services.

At any given price level in a given timeframe, aggregate demand reflects the overall demand for goods and services. Since the two metrics are measured in the same way, aggregate demand over the long-term equals gross domestic product (GDP). GDP reflects the total amount of products and services produced in an economy, while the demand or desire for those goods is the aggregate demand. The aggregate demand and GDP grow or decrease together as a result of the same measurement methods.

Technically speaking, after adjusting for the price level, aggregate demand only equals GDP in the long run. This is because total output is determined by short-run aggregate demand for a single nominal price level, whereby nominal inflation is not modified. Depending on the methodologies used and the different components, other differences in calculations will happen.

Both consumer products, capital goods (factories and equipment), exports, imports, and government expenditure programs consist of aggregate demand. As long as they sell at the same market value, the variables are all considered equal.