In the aggregate demand and aggregate supply model, when does the aggregate quantity of goods demanded increase?
A) when real wealth rises
B) when the interest rate rises
C) when the dollar appreciates
D) when the expected price level rises

Question

Quizplus · Accepted Answer

When real wealth rises, households feel wealthier and thus are willing to spend more on goods and services, increasing the aggregate quantity of goods demanded. The other options (B, C, and D) would generally lead to a decrease in aggregate demand as they represent higher costs or higher expected inflation.

In the Aggregate Demand and Aggregate Supply Model, When Does