Question

g The AD curve is the relationship between A. the quantity of real GDP demanded and the quantity of real GDP supplied. B. the quantity of real GDP demanded and the unemployment rate. C. aggregate planned expenditure and real GDP when the price level is fixed. D. aggregate planned expenditure and the price level. E. aggregate planned expenditure and the quantity of real GDP demanded.

Answer 1

D. aggregate planned expenditure and the price level.

Step-by-step explanation:

Aggregate demand (AD) can be defined as the total amount spent on domestic goods and services in an economy. It is called total planned expenditure by economists.

Aggregate demand (AD) consist of four components of demand:

1. Consumption

2. Savings

3. Government spending

4. Net export, that is, export minus import.

The aggregate demand (AD) curve shows the relationship between total spending on domestic goods and services at each price level.

D. aggregate planned expenditure and the price level is the correct answer.