Which of these questions does aggregate demand help us answer? I. What determines the total amount of our output that individuals, firms, governments and foreigners want to buy?
II) What is the economy's long-run real Gross Domestic Product (GDP)?
III) What determines the economy's equilibrium price level and the rate of inflation?
A) I only
B) I and II
C) II and III
D) I and III

Question

Quizplus · Accepted Answer

Aggregate demand helps us answer questions related to the total output that individuals, firms, governments, and foreigners want to buy (I) and the determination of equilibrium price level and rate of inflation (III). It does not directly relate to the economy's long-run real Gross Domestic Product (GDP) (II).

Which of These Questions Does Aggregate Demand Help Us Answer