What does the aggregate demand curve illustrate?
A) the relationship between interest rates and income levels
B) the relationship between the price level and real GDP
C) the relationship between the price level and interest rates
D) the relationship between income levels and real GDP levels

Question

What does the aggregate demand curve illustrate?  
A) the relationship between interest rates and income levels 
B) the relationship between the price level and real GDP 
C) the relationship between the price level and interest rates 
D) the relationship between income levels and real GDP levels

Quizplus · Accepted Answer

The aggregate demand curve illustrates the relationship between the price level and real GDP. It shows the amount of goods and services that will be demanded at different price levels, all other factors being constant. Essentially, it shows the level of spending in the economy at different price levels.

What Does the Aggregate Demand Curve Illustrate