How is aggregate supply defined?

The definition of aggregate supply refers to the total quantity of goods and services that producers are willing and able to sell at a given overall price level in an economy during a specified period. This concept is fundamental in macroeconomics as it indicates the production capabilities of an economy and how this relates to overall economic output.

When we focus on the correct choice, it encapsulates the essence of aggregate supply by highlighting the quantity aspect, which is pivotal in understanding macroeconomic models. Producers' willingness to sell goods and services provides insight into economic performance and helps determine the potential output of an economy. Factors such as production capacity, technology, and labor influence the level of aggregate supply.

In contrast, the other options represent different macroeconomic concepts. The overall price level describes how prices move in the economy but does not indicate the quantity of goods and services available. The amount of money in circulation pertains to monetary policy and liquidity in the economy rather than production output. Finally, consumer confidence reflects individuals’ perceptions about the economy and their willingness to spend but does not directly define aggregate supply. Each of these aspects plays a role in the broader economic framework but does not capture the definition of aggregate supply itself.