The AD Curve ________.
A)demonstrates how central banks respond to changes in interest rates by changing the inflation rate
B)shows how changes in equilibrium output affect the inflation rate
C)explains long run fluctuations in output and inflation
D)all of the above
E)none of the above

Question

Quizplus · Accepted Answer

The AD (Aggregate Demand) Curve shows the relationship between the overall price level and the total demand for goods and services in an economy, not specifically how central banks respond, how changes in output affect inflation, or explaining long-run fluctuations in output and inflation.