Consider a simple macro model with demand-determined output.Other things being equal,the price level and desired aggregate expenditure are related to each other
A)positively.
B)proportionally.
C)progressively.
D)exponentially.
E)negatively.

Question

Quizplus · Accepted Answer

In a simple macro model with demand-determined output, the price level and desired aggregate expenditure are typically inversely related, meaning as the price level increases, desired aggregate expenditure decreases, and vice versa. This is because higher prices tend to reduce the purchasing power of consumers, leading to lower overall spending.

Consider a Simple Macro Model with Demand-Determined Output