Aggregate demand
A)measures the amount of a nation's goods and services that people are willing to buy.
B)measures the amount of a nation's labour, capital, and technology that people are willing to buy.
C)is the relationship between the quantity of real GDP demanded and the price level.
D)increases when the price level falls.
E)both C and D are correct.

Question

Quizplus · Accepted Answer

Aggregate demand measures the relationship between the quantity of real GDP demanded and the price level. Option D, that aggregate demand increases when the price level falls, is also correct. Option A is incorrect because it refers to the demand for goods and services only, not the demand for all components of GDP. Option B is incorrect because it does not capture the concept of demand for GDP at all.

Aggregate Demand