Aggregate supply is an indicator of what aspect of the economy?

Aggregate supply represents the total output of goods and services that firms are willing and able to produce at different price levels within an economy over a specific period. It reflects the overall production capacity of the economy, indicating how much can be supplied when all resources are utilized efficiently.

During periods of economic growth, aggregate supply typically increases as businesses expand their production capabilities, invest in new technologies, and hire more workers. Conversely, during economic downturns, aggregate supply may contract due to reduced production and investments.

The other choices focus on different aspects of the economy. Employment levels relate to labor demand and labor supply dynamics, touching on how many individuals are employed and the conditions of the labor market. The reservation price refers to the minimum price at which consumers are willing to purchase a good or service, which is more about consumer behavior than production capacity. The amount of money in circulation pertains to monetary supply and influences aspects such as inflation and interest rates but does not directly express the total output capability of the economy. Thus, the focus of aggregate supply is best aligned with total planned output of goods and services.