The aggregate demand curve shows how real GDP purchased varies with changes in:
A) unemployment.
B) the price of a particular good.
C) the overall price level.
D) the interest rate.

Question

Quizplus · Accepted Answer

The aggregate demand curve shows the relationship between the overall price level (measured by the inflation rate) and the real GDP purchased. This means that as the overall price level increases, the quantity of real GDP demanded decreases, and vice versa. Changes in unemployment, the price of a particular good, and the interest rate can have an impact on aggregate demand, but they are not directly reflected in the aggregate demand curve. Therefore, option C is the most appropriate choice.

The Aggregate Demand Curve Shows How Real GDP Purchased Varies