The _____ curve shows the negative relationship between the aggregate price level and the quantity of aggregate output demanded in the economy.
A) aggregate demand
B) short-run aggregate supply
C) long-run aggregate supply
D) investment demand

Question

Quizplus · Accepted Answer

The aggregate demand curve shows the negative relationship between the aggregate price level (i.e. the general level of prices in the economy) and the quantity of aggregate output demanded (i.e. the total amount of goods and services that households, businesses, and governments are willing to buy at a given price level) in the economy. As the price level increases, the quantity of aggregate output demanded decreases, ceteris paribus. This is due to various factors that affect the purchasing power of consumers and the profitability of businesses, such as changes in interest rates, exchange rates, government policies, and consumer and investor confidence.

The _____ Curve Shows the Negative Relationship Between the Aggregate