The total quantity of an economy's final goods and services demanded at different inflation rates is
A)the aggregate supply curve.
B)the aggregate demand curve.
C)the Phillips curve.
D)the aggregate expenditure function.

Question

Quizplus · Accepted Answer

The concept described in the question is the definition of the aggregate demand curve, which shows the relationship between the overall price level and the quantity of goods and services demanded in an economy. Therefore, choice (B) is the correct answer.

(A) The aggregate supply curve shows the relationship between the overall price level and the quantity of goods and services supplied in an economy, not demanded.

(C) The Phillips curve shows the relationship between unemployment and inflation, not the quantity of goods and services demanded.

(D) The aggregate expenditure function shows the relationship between total spending and the level of output in an economy, but it does not take into account changes in the overall price level, which is the focus of the question.

The Total Quantity of an Economy's Final Goods and Services