All points on an economy's AD curve
A)correspond to a particular point on industry demand curves for a particular product.
B)relate a particular price level to the total demand for output at that price level.
C)show only changes in relative prices and quantities.
D)show the direct relationship between the price level and net exports.
E)show the direct relationship between the price level and the demand for consumer goods.

Question

Quizplus · Accepted Answer

Points on the AD curve represent different price levels and corresponding levels of aggregate demand for output in the economy. The AD curve shows the relationship between the price level and the quantity of real GDP demanded in the economy, holding all other factors constant. It does not specifically correspond to a particular industry or product demand curve, nor does it relate to changes in relative prices or net exports.

All Points on an Economy's AD Curve