The aggregate demand curve shows a ________ relationship between ________ and aggregate output ________.
A) positive; the interest rate; demanded
B) negative; the price level; supplied
C) positive; the price level; demanded
D) negative; the price level; demanded

Question

Quizplus · Accepted Answer

The aggregate demand curve shows a negative relationship between the price level and aggregate output demanded. This means that as the price level rises, the quantity of aggregate output demanded falls, and vice versa. This is because a higher price level reduces the purchasing power of consumers and firms, leading to a decrease in their demand for goods and services, which in turn reduces the level of aggregate output demanded.

The Aggregate Demand Curve Shows a ________ Relationship Between ________

The Aggregate Demand Curve Shows a Relationship Between