Points along the aggregate demand curve represent combinations of the price level and current output for which
A)the money market and the goods market are in equilibrium, but the market for nonmoney assets may not be.
B)the goods market and the market for nonmoney assets are in equilibrium, but the money market may not be.
C)the money market and the market for nonmoney assets are in equilibrium, but the goods market may not be.
D)the money market, the market for nonmoney assets, and the goods market must all be in equilibrium.

Question

Quizplus · Accepted Answer

Points along the aggregate demand curve represent combinations of the price level and current output for which all three markets—the money market, the market for nonmoney assets, and the goods market—are in equilibrium. This is because the aggregate demand curve reflects the total demand for goods and services in an economy at different price levels, assuming that all markets are balanced.

Points Along the Aggregate Demand Curve Represent Combinations of the Price