Based on Our Understanding of the Aggregate Demand Curve, We

question 95

Multiple Choice

Based on our understanding of the aggregate demand curve, we know that a(n) _______ in the price level causes the quantity of real GDP demanded to _______.

• A) decrease; increase
• B) decrease; decrease
• C) decrease; remain unchanged
• D) increase; increase

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Definitions:

Reference Value

A baseline number or set of numbers used for comparison purposes in analysis.

Differentiation Value

The unique attributes or benefits that make a product or service stand out from competitors in the eyes of consumers.

Unit Product Cost

The total cost (variable and fixed) incurred to produce, store, and sell one unit of a product.

Elastic Demand

Describes a market condition in which the demand for a product is sensitive to price changes.