The AD curve shows the sum of
A) consumption expenditure, investment, the price level, and real GDP.
B) the price level, employment, and real GDP.
C) consumption expenditure, investment, and real GDP.
D) consumption expenditure, investment, government expenditures on goods and services, and net exports.

Question

Quizplus · Accepted Answer

The AD curve shows the sum of consumption expenditure, investment, government expenditures on goods and services, and net exports. This is because aggregate demand is the total amount of goods and services that all buyers in an economy want to purchase at any given price level. Therefore, it includes all components of GDP, including consumption expenditure, investment, government expenditures on goods and services, and net exports.

The AD Curve Shows the Sum of