The total demand by residents of the country for goods and services (including public services) is called the aggregate demand. We will return to this discussion later.
When a country exports, an export component is added to the aggregate demand, i.e., demand from those residing abroad.
The total amount of goods and services produced in a country is called the aggregate supply. Aggregate supply in a closed economy equals the GDP. When a country imports, this element is added to aggregate supply, which contributes to increasing the supply of goods in the economy.