A relatively flat aggregate demand curve indicates that
A) velocity is relatively constant.
B) the economy is near full employment.
C) inflation is relatively low.
D) spending is sensitive to changes in the price level.

Question

Quizplus · Accepted Answer

A relatively flat aggregate demand curve suggests that spending is highly sensitive to changes in the price level, meaning small changes in prices can lead to large changes in the quantity of goods and services demanded.

A Relatively Flat Aggregate Demand Curve Indicates That