An economy's aggregate demand curve shows that, other things constant:
A) when the general price level changes, there is a shift in the curve.
B) there is some price level which generates an aggregate equilibrium in the economy.
C) any reduction in the general price level causes a reduction in GDP.
D) none of the above

Question

Quizplus · Accepted Answer

The aggregate demand curve shows the relationship between the general price level and the quantity of goods and services demanded. A change in the price level results in a movement along the curve, not a shift.

An Economy's Aggregate Demand Curve Shows That, Other Things Constant