The AD curve is a graph depicting the
A)relationship between the price level and the quantity of real GDP supplied.
B)business cycle during expansions and recessions.
C)relationship between the price level and the quantity of real GDP demanded.
D)relationship between the price level and potential GDP.
E)relationship between the aggregate quantity of real GDP demanded and the aggregate quantity of real GDP supplied.

Question

Quizplus · Accepted Answer

The AD curve represents the relationship between the price level and the quantity of real GDP demanded. The curve slopes downward because as the price level increases, the demand for goods and services decreases, resulting in a decrease in the quantity of real GDP demanded. Conversely, as the price level decreases, the demand for goods and services increases, resulting in an increase in the quantity of real GDP demanded.

The AD Curve Is a Graph Depicting the