The aggregate demand curve shows the relationship between the volume of purchases and:
A) The amount producers supply.
B) Real GDP.
C) Which goods and services people will buy.
D) The price level.

Question

Quizplus · Accepted Answer

The aggregate demand curve shows the relationship between the volume of purchases and the price level. As the price level decreases, people are more willing and able to buy more goods and services, leading to an increase in aggregate demand. On the other hand, as the price level increases, people will reduce their purchases, leading to a decrease in aggregate demand. The aggregate demand curve does not indicate the amount producers supply or which goods and services people will buy directly, but it does reflect the overall level of real GDP.

The Aggregate Demand Curve Shows the Relationship Between the Volume