The aggregate demand curve is a relationship between
A)real aggregate expenditure and real GDP.
B)real income and real GDP.
C)real prices and real GDP.
D)the price level and the quantity of real GDP demanded.
E)the price level and nominal GDP.

Question

Quizplus · Accepted Answer

The aggregate demand curve shows the relationship between the price level and the quantity of real GDP demanded in the economy. As the price level increases, the quantity of real GDP demanded decreases and vice versa. Real aggregate expenditure, real income, and real prices are not included in the aggregate demand curve as they are not directly related to the overall demand for goods and services in the economy. Nominal GDP is not included as it does not take into account changes in the price level.

The Aggregate Demand Curve Is a Relationship Between