Refer to the graph above, which shows an aggregate demand curve. If the price level decreases from 200 to 100, the real output demanded will:
A) Increase by $800 billion
B) Increase by $200 billion
C) Decrease by $600 billion
D) Decrease by $200 billion

Question

Refer to the graph above, which shows an aggregate demand curve. If the price level decreases from 200 to 100, the real output demanded will:
A) Increase by $800 billion 
B) Increase by $200 billion 
C) Decrease by $600 billion 
D) Decrease by $200 billion

Quizplus · Accepted Answer

According to the aggregate demand curve, as the price level decreases, the quantity demanded of real output increases. In this case, the price level is decreasing from 200 to 100, resulting in an increase in the real output demanded by $200 billion.

Refer to the Graph Above, Which Shows an Aggregate Demand