The Aggregate Demand Curve

question 98

Multiple Choice

The aggregate demand curve

• A)is upsloping because a higher price level is necessary to make production profitable as production costs rise.
• B)is downsloping because production costs decline as real output increases.
• C)shows the amount of expenditures required to induce the production of each possible level of real output.
• D)shows the amount of real output that will be purchased at each possible price level.

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Definitions:

High-Opportunity Cost

Refers to the high value or benefit that is foregone from not choosing the next best alternative with available resources.

Low-Opportunity Cost

Describes a situation where choosing one option over another entails a minimal sacrifice of alternative opportunities or benefits.

International Trade

The trading of products, services, and financial assets between different countries or territories.

Production

The process of creating goods or services by combining labor, capital, and resources to meet consumer demands or needs.