The aggregate demand curve shows the relationship between prices and the
A) level of real GDP demanded.
B) level of real GDP produced.
C) level of nominal GDP demanded.
D) level of nominal GDP produced.

Question

Quizplus · Accepted Answer

The aggregate demand curve shows the relationship between prices (usually represented by the GDP deflator or Consumer Price Index) and the level of real GDP demanded in an economy. As prices increase, the level of real GDP demanded generally decreases due to factors such as reduced consumer purchasing power and decreased business investment.

The Aggregate Demand Curve Shows the Relationship Between Prices and the