The aggregate demand curve shows that, ceteris paribus,
A) at higher price levels, total quantity of output demanded is higher.
B) at lower price levels, total quantity of output supplied is lower.
C) at lower price levels, total quantity of output demanded is higher.
D) at higher price levels, total quantity of output supplied is lower.

Question

Quizplus · Accepted Answer

The aggregate demand curve shows the relationship between the overall price level in an economy and the total quantity of goods and services demanded by households, businesses, and the government. Ceteris paribus, which means other things being equal, the quantity of output demanded increases as the price level decreases. This is because lower prices make goods and services more affordable, leading to an increase in demand for them. Therefore, the correct choice is C - at lower price levels, total quantity of output demanded is higher.

The Aggregate Demand Curve Shows That, Ceteris Paribus