Which one of the following statements is correct?
A) If the general price level increases, aggregate demand will eventually increase also.
B) A reduction in the general price level results in a reduction in aggregate demand.
C) When adjusted for inflation, there is no relationship between the general price level and the level of real aggregate demand.
D) A shift of the aggregate demand curve will eventually change both the price level and the level of real output.

Question

Quizplus · Accepted Answer

A shift in the aggregate demand curve affects both the price level and the level of real output in the economy, as it represents changes in the economy that impact the overall demand for goods and services at every price level.

Which One of the Following Statements Is Correct