Which of the following is true?

• Aggregate demand refers to the sum total of both demand and supply for all the goods and services in an economy during the accounting year, AD = C + I.
• It refers to the total expenditure on the final goods and services in the economy.
• If people spend less than what they were spending on goods and services earlier, it indicates a rise in the aggregate demand and vice versa.
• The components of aggregate demand and aggregate expenditure are same.
• There is an inverse relation between the aggregate demand and general price level.

2, 4 and 5

Aggregate demand refers to the sum total of demand for all the goods and services in an economy during the accounting year, AD = C + I. Whereas, aggregate supply refers to the total flow of goods and services in an economy during a period of one year. If people spend more than what they were spending on goods and services earlier, it indicates a rise in the aggregate demand and vice versa. The components of aggregate demand and aggregate expenditure in 4 sector model include: private consumption expenditure, investment expenditure, government expenditure and net exports.