Which of the following is true about how the aggregate demand curve differs from the individual's demand curve?
A) The individual's demand curve shows the relationship between price and quantity demanded while the aggregate demand curve is not influenced by price.
B) For the individual's demand curve equilibrium is determined by the intersection of supply and demand while for the aggregate demand curve equilibrium is determined by the real balance effect.
C) The individual's demand curve is just for an individual while the aggregate demand curve looks at the entire circular flow of income.
D) The individual's demand curve will shift when there is a change in taxes while the aggregate demand curve will not.
Correct Answer:
Verified
Q5: According to the real-balance effect, an increase
Q6: The real-balance effect partially explains
A) the downward
Q7: Holding nominal money balances constant, a decrease
Q8: Aggregate demand shows the relationship between
A) the
Q9: A fall in the price level
A) increases
Q11: The aggregate demand curve would shift to
Q12: The U.S. aggregate demand curve would shift
Q13: The aggregate demand curve
A) tells us what
Q14: An increase in the level of prices
Q15: Which one of the following correctly describes
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