The aggregate demand curve illustrates the ________ relationship between the ________ and the ________.
A) positive; price level; quantity demanded of real gross domestic product (GDP)
B) positive; price level; quantity demanded of nominal GDP
C) inverse; price level; quantity demanded of real GDP
D) inverse; price level; quantity demanded of nominal GDP
E) positive; level of spending; level of real GDP

Question

Quizplus · Accepted Answer

The aggregate demand curve is downward sloping, indicating an inverse relationship between the price level and the quantity demanded of real GDP. As the price level increases, the quantity demanded of real GDP decreases, and vice versa. The aggregate demand curve does not directly illustrate the relationship between the level of spending and the level of real GDP, although there is a positive relationship between these two variables.

The Aggregate Demand Curve Illustrates the ________ Relationship Between the ________

The Aggregate Demand Curve Illustrates the Relationship Between the