The Aggregate Demand Curve Shows That, If Other Factors Are

question 32

Multiple Choice

The aggregate demand curve shows that, if other factors are held constant, the higher the price level, the

• A) larger consumption expenditure.
• B) greater the quantity of real GDP demanded.
• C) smaller the quantity of real GDP demanded.
• D) None of the above answers is correct.

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Definitions:

Output

The total amount of something produced by a person, machine, or industry.

Returns To Scale

An economic concept describing how output changes in response to a proportional change in all inputs; indicating constant, increasing, or decreasing returns to scale.

Production Function

A mathematical equation that describes the maximum amount of output that can be obtained from a given set of inputs.

Output

The amount of goods or services produced by a business, industry, or economy in a given period.