Other things constant, the economyʹs aggregate demand curve shows that
A) the quantity of real GDP demanded decreases when the price level rises.
B) any change in the price level shifts the aggregate demand curve.
C) as the price level falls, real GDP decreases.
D) the quantity of real GDP demanded and the price level are not related.

Question

Quizplus · Accepted Answer

The aggregate demand curve shows an inverse relationship between the price level and the quantity of real GDP demanded. This means that as the price level rises, the quantity of real GDP demanded decreases, holding all other factors constant. Therefore, choice A is the correct answer. Choices B, C, and D are all incorrect statements.

Other Things Constant, the Economyʹs Aggregate Demand Curve Shows That