The aggregate demand curve shows
A)the demand for goods depending on the relative price of goods compared to financial assets.
B)the amount of output that can be obtained given the current production function in the economy.
C)the relation between the aggregate quantity of goods demanded and the price level.
D)the relation between the real interest rate and output when the goods market clears.

Question

Quizplus · Accepted Answer

The aggregate demand curve shows the relationship between the price level (which is an indication of the relative cost of goods and services) and the amount of aggregate (total) output demanded in the economy. It represents the demand for goods and services in the economy, based on consumer spending, investment spending, government spending, and net export spending.

The Aggregate Demand Curve Shows