In the AD/AS Model, the Aggregate Demand for Goods and Services

question 157

Multiple Choice

In the AD/AS model, the aggregate demand for goods and services is composed of the purchases made by

• A) households and foreigners (net exports).
• B) businesses, bondholders, and foreigners (net exports).
• C) businesses and governments.
• D) consumers, investors, governments, and foreigners (net exports).

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Definitions:

Price Orientation

An approach to pricing strategy focused on the cost to set prices, where customer demand or competition may play a secondary role.

Donuts

A type of fried dough confection or dessert food, commonly circular with a hole in the middle, often glazed or sugar-coated and sometimes filled.

Demand Curve

A graphical representation showing the relationship between the price of a product and the quantity of the product that consumers are willing and able to buy.

Economic Theory

Economic theory involves a set of principles explaining how economies operate, including the production, distribution, and consumption of goods and services.