REPLY TO THIS CLASSMATE ON THE DISCUSSION THREAD WITH 100 WORDS

The prices of goods and services are the main driver of supply and demand in the economy. The inverse is also true, though: changes in supply and demand impact the price of goods and services. The link between aggregate demand and general price levelsis not necessarily clear or direct. However, in the most general sense (and under ceteris paribusconditions), an increase in aggregate demand corresponds with an increase in the price level. Aggregate demand increases when the components ofaggregate demand-including consumption spending, investment spending, government spending, and spending on exports minus imports-rise. Aggregate demand is an economic measurement of the total quantity of finished goods and services that are demanded in an economy. This measurement is expressed as the total amount of money exchanged for those goods and services at a specific price level and point in time. Price level is the average of current prices across the entire spectrum of goods and services produced in the economy. Of course, the general price level is purely hypothetical; there is obviously no uniform price for the many types of goods and services in the economy. In general, when the price of a good or service changes, consumer demand for that good or service is also impacted. This is the basis for the law of demand, which states that any increase in prices tends to cause the demand for a good or service to decline.An example of transaction demand for money iscarrying money in your pocket to buy groceries, utensils, to buy a train ticket, etc. An individual who owns some stocks, bonds, jewelry, artwork, a home, a savings account at his credit union, and has $5,000 stashed away in a safe box in his basementare some examples of an asset demand for money. Thank you for letting me share.