_____ varies along a given aggregate demand curve.
A)The nominal interest rate in the domestic country
B)The exchange rate between the domestic currency and a foreign currency
C)The aggregate supply in a foreign country
D)The price level in the domestic country
E)The prices of resources used in production

Question

Quizplus · Accepted Answer

Along a given aggregate demand curve, the only variable that varies is the price level in the domestic country. The nominal interest rate in the domestic country (A) and the exchange rate between the domestic currency and foreign currency (B) are both determined by other factors such as monetary policy and international trade. The aggregate supply in a foreign country (C) and the prices of resources used in production (E) are not directly related to the aggregate demand curve.

_____ Varies Along a Given Aggregate Demand Curve