How does aggregate demand curve (AD) differ from an individual demand curve (D)?
A) AD is generally vertical while D is usually downward sloping.
B) D represents the price-quantity relationship for a single good or service while AD looks at the entire economic system.
C) Look for D in macroeconomic analyses and for AD in microeconomics.
D) AD is generally a downward sloping curve while D usually slopes upward.

Question

Quizplus · Accepted Answer

The main difference between the aggregate demand curve (AD) and an individual demand curve (D) is that the latter represents the price-quantity relationship for a single good or service, while AD looks at the entire economic system. AD shows the total amount of goods and services that people want to buy at various price levels across the economy. In contrast, individual demand curves show how much of a particular good or service an individual is willing to buy at different prices, holding other factors constant. Additionally, while an individual demand curve is typically downward sloping, AD is generally a downward sloping curve due to the wealth effect, interest rate effect, and international trade effect.

How Does Aggregate Demand Curve (AD) Differ from an Individual