The aggregate demand curve shows that, if other factors are held constant, the higher the price level, the
A) greater the quantity of real GDP demanded.
B) smaller the quantity of real GDP demanded.
C) larger consumption expenditure.
D) None of the above answers is correct.

Question

Quizplus · Accepted Answer

The aggregate demand curve illustrates that, if other factors remain constant, a higher price level leads to a smaller quantity of real GDP demanded. This is because higher prices generally reduce purchasing power, leading to lower overall spending.

The Aggregate Demand Curve Shows That, If Other Factors Are