The aggregate demand curve illustrates the relationship between
A) the aggregate demand for goods and services, and the real interest rate.
B) the aggregate demand for goods and services, and the level of current output.
C) the level of current output and the real interest rate.
D) the aggregate demand for goods and services, and the price level.

Question

Quizplus · Accepted Answer

The aggregate demand curve shows the relationship between the aggregate demand for goods and services and the price level in an economy. As the price level increases, the quantity of goods and services demanded decreases, and vice versa. This relationship is captured by the downward slope of the aggregate demand curve. The curve is not directly related to the real interest rate or the level of current output.

The Aggregate Demand Curve Illustrates the Relationship Between