The dynamic aggregate demand curve has a slope of-1, so that a one-percentage point reduction in inflation contributes to a one-percentage point increase in real GDP growth.

Question

Quizplus · Accepted Answer

This statement correctly describes the slope of the dynamic aggregate demand curve, which shows the relationship between inflation and real GDP growth. A decrease in inflation leads to an increase in real GDP growth along this curve, with a slope of -1 indicating a one-to-one relationship between the two variables.

The Dynamic Aggregate Demand Curve Has a Slope Of-1, So