If
Equals zero,
A)the AD curve is horizontal.
B)the AD curve is relatively steep.
C)the AD curve is relatively flat.
D)the AD curve is vertical.
E)Not enough information is given.

Question

If 
Equals zero,
A)the AD curve is horizontal. 
B)the AD curve is relatively steep. 
C)the AD curve is relatively flat. 
D)the AD curve is vertical. 
E)Not enough information is given.

Quizplus · Accepted Answer

The equation given is a standard form for a vertical line, where the x-value is constant and the y-value can vary. In this case, the x-value represents the price level and the y-value represents the level of real output (GDP). Therefore, if the equation is equal to zero, it means that at any price level, there is no demand for real output. This implies that the AD curve is vertical.

If Equals Zero