Legal Definitions - aggregate supply

Definition: Aggregate supply refers to the total amount of goods and services produced in an economy during a specific period of time. It is the sum of all individual supplies of goods and services in an economy.

Example: Let's say that in a particular country, there are 10 companies that produce cars. Each company produces 100 cars per month. Therefore, the aggregate supply of cars in that country is 1,000 cars per month (10 companies x 100 cars per company).

Explanation: This example illustrates how aggregate supply is the sum of all individual supplies. In this case, the individual supplies are the 100 cars produced by each company, and the aggregate supply is the total of all those individual supplies, which is 1,000 cars per month.