Answer: True
Explanation: The prices of goods and services are the main driver of supply and demand in the economy. The inverse is also true, though: changes in supply and demand impact the price of goods and services. The link between aggregate demand and general price levels is not necessarily clear or direct. However, in the most general sense (and under ceteris paribus conditions), an increase in aggregate demand corresponds with an increase in the price level.
Aggregate demand increases when the components of aggregate demand–including consumption spending, investment spending, government spending, and spending on exports minus imports–rise.
The link between aggregate demand and general price levels is not necessarily clear or direct.
Price level is the average of current prices across the entire spectrum of goods and services produced in the economy.
Aggregate demand is an economic measurement of the total quantity of finished goods and services that are demanded in an economy; components of aggregate demand include consumption spending, investment spending, government spending, and spending on exports minus imports