The Aggregate Demand Curve

question 250

Multiple Choice

The aggregate demand curve

• A) shifts rightward when the price level increases and leftward when the price level falls.
• B) shifts rightward when taxes are decreased.
• C) shifts rightward when foreign incomes decrease and shifts leftward when foreign incomes increase.
• D) does not shift, unlike market demand curves.

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Definitions:

Average Variable Cost

The cost per unit produced that varies with the level of output, calculated by dividing total variable costs by the quantity of output.

Farmer

An individual engaged in agriculture, raising living organisms for food or raw materials.

Profit-Maximizing

A business strategy focused on increasing profits to the highest possible level given the firm's constraints.

Wheat

A cereal grain that is a worldwide staple food, used to make a wide range of products including bread, pasta, and cereal.