The AD curve relates the price level to
A)equilibrium savings and wealth.
B)desired consumption.
C)equilibrium nominal GDP if output is demand determined.
D)equilibrium real GDP if output is demand determined.
E)desired aggregate expenditure.

Question

Quizplus · Accepted Answer

The AD (aggregate demand) curve shows the relationship between the price level and the equilibrium level of real GDP, assuming that output is demand-determined. Therefore, option D is the correct answer as it relates the price level to equilibrium real GDP. Options A, B, C, and E do not directly relate to the AD curve.

The AD Curve Relates the Price Level to