Aggregate Demand refers to the total quantity of goods and services that consumers, businesses, and the government are willing to purchase at various price levels in a given period. It includes consumption, investment, government spending, and net exports. When aggregate demand increases, it can lead to higher economic growth and potentially inflation if the economy is at or near full capacity. Aggregate Supply represents the total output of goods and services that producers are willing to supply at different price levels. It reflects the production capacity of an economy and is influenced by factors like labor, capital, and technology. Changes in aggregate supply can affect overall economic performance, impacting employment and price levels.