What Is the Difference Between a Change in Aggregate Demand

question 50

Multiple Choice

What is the difference between a change in aggregate demand and a change in aggregate quantity of real GDP demanded?

• A) A change in aggregate demand is represented by a movement along the aggregate demand curve in response to a price change while a change in aggregate quantity of real GDP demanded is represented by a shift of the aggregate supply curve in response to a change in a component of aggregate demand.
• B) A change in aggregate demand is represented by a shift of the aggregate demand curve in response to a change in the actual price level while a change in aggregate quantity of real GDP demanded is represented by a movement along the aggregate demand curve in response to a change in the expected price level.
• C) A change in aggregate demand is represented by a shift of the aggregate demand curve in response to a change in a component of aggregate demand while a change in aggregate quantity of real GDP demanded is represented by a movement along the aggregate demand curve in response to a change in the price level.
• D) There is no difference between the two terms.

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Definitions:

Short-Term Obligation

A debt or other financial obligation that is due to be paid within one year or within the entity's operating cycle if longer.

Long-Term Liability

Obligations or debts due in more than one year, reflecting a company's financing activities and including loans, bonds payable, and lease obligations.

GAAP Requirements

The standards or guidelines for financial accounting and reporting that accountants are required to follow, known as Generally Accepted Accounting Principles.

Vacation Pay

Compensation paid to employees for days they are entitled to take off work but choose to work instead or as a benefit for days they are allowed not to work.