Refer to the graph, which shows an aggregate demand curve. If the price level decreases from 200 to 100, the real output demanded will
A) increase by $800 billion.
B) increase by $200 billion.
C) decrease by $600 billion.
D) decrease by $200 billion.

Question

Refer to the graph, which shows an aggregate demand curve. If the price level decreases from 200 to 100, the real output demanded will
A) increase by $800 billion. 
B) increase by $200 billion. 
C) decrease by $600 billion. 
D) decrease by $200 billion.

Quizplus · Accepted Answer

According to the graph, a decrease in the price level from 200 to 100 leads to an increase in the quantity of real output demanded from $14,200 billion to $14,400 billion. The increase in real output demanded is $200 billion. Therefore, the correct choice is B.

Refer to the Graph, Which Shows an Aggregate Demand Curve