Both aggregate demand and aggregate supply curves are relationships between
A) income and employment.
B) output and income.
C) the price level and real output.
D) interest rates and the prices of financial assets.
E) inflation and unemployment.

Question

Quizplus · Accepted Answer

The aggregate demand curve shows the relationship between the price level and the quantity of real output demanded by households, businesses, and governments. The aggregate supply curve shows the relationship between the price level and the quantity of real output supplied by firms. Therefore, both curves are relationships between the price level (inflation) and real output (employment and production). Choices A, B, D, and E do not accurately describe the relationships shown in the aggregate demand and supply curves.

Both Aggregate Demand and Aggregate Supply Curves Are Relationships Between