What does aggregate demand represent in an economy?

Aggregate demand represents the total quantity of goods and services that all consumers, businesses, government, and foreign buyers are willing and able to purchase at various price levels in a given period. It encompasses the overall expenditure in an economy on all final goods and services, reflecting the sum of demand from different sectors.

Choosing the option that defines aggregate demand as "the quantity demanded of all goods and services" captures this comprehensive nature, as it recognizes the collective demand from various participants in the economy, not just a specific category of goods or the storage of goods. In contrast, the other options either misrepresent the scope of aggregate demand or focus too narrowly on specific elements, missing the broader, holistic view required to understand aggregate demand's role in economic analysis.