The Aggregate Expenditures Model and the Aggregate Demand Curve Can

question 262

Multiple Choice

The aggregate expenditures model and the aggregate demand curve can be reconciled because, other things equal, in the aggregate expenditures model,

• A) changes in the price level have no effect on the equilibrium level of GDP.
• B) an increase in the price level increases the real value of wealth.
• C) the level of aggregate expenditures and therefore the level of real GDP vary inversely with the price level.
• D) the level of aggregate expenditures and therefore the level of real GDP vary directly with the price level.

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