The horizontal axis for an aggregate demand curve measures
A) quantity demanded of the representative good.
B) real Gross Domestic Product (GDP).
C) output of all goods and services measured as a quantity index.
D) disposable personal income.

Question

Quizplus · Accepted Answer

The horizontal axis of an aggregate demand curve measures real Gross Domestic Product (GDP), which is the total value of all goods and services produced in an economy. This is because the aggregate demand curve represents the relationship between the overall level of spending in the economy and the level of real GDP.

The Horizontal Axis for an Aggregate Demand Curve Measures