What is measured on the vertical axis of the aggregate demand graph?
A) nominal income
B) real GDP per year
C) the price level
D) unemployment

Question

Quizplus · Accepted Answer

The vertical axis of the aggregate demand graph represents the price level. This is because the aggregate demand curve shows the relationship between the overall level of prices in the economy and the quantity of real GDP demanded by households, businesses, and the government. As the price level increases, the quantity of real GDP demanded generally decreases, and vice versa. Therefore, the price level is the variable that is measured on the vertical axis of the aggregate demand graph.

What Is Measured on the Vertical Axis of the Aggregate