The aggregate demand curve tells us possible:
A) combinations of M and Y for a given value of P.
B) combinations of M and P for a given value of Y.
C) combinations of P and Y for a given value of M.
D) results if the Federal Reserve reduces the money supply.

Question

Quizplus · Accepted Answer

The aggregate demand curve shows the combinations of the price level (P) and real GDP (Y) that are in equilibrium for a given state of the economy, assuming other factors like the money supply (M) are constant. It does not directly relate to changes in the money supply or specific combinations of M and Y or M and P for given values of other variables.

The Aggregate Demand Curve Tells Us Possible