The dynamic aggregate demand curve illustrates the _____ relationship between the quantity of output demanded in the short run and _____.
A) positive; inflation
B) positive; the price level
C) negative; inflation
D) negative; the price level

Question

Quizplus · Accepted Answer

The dynamic aggregate demand curve shows a negative relationship between the quantity of output demanded in the short run and inflation, as higher inflation typically leads to higher interest rates, reducing spending and output demanded.

The Dynamic Aggregate Demand Curve Illustrates the _____ Relationship Between