The Aggregate Demand Curve Is

question 146

Multiple Choice

The aggregate demand curve is:

• A)vertical if full employment exists.
• B)horizontal when there is considerable unemployment in the economy.
• C)downward sloping because of the interest-rate, real balances, and foreign trade effects.
• D)downward sloping because production costs decrease as real output increases.

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Definitions:

Equivalent

Equal in value, amount, function, meaning, or the like.

Per Annum

An annual occurrence or rate, indicating something that happens or is calculated over the course of a year.

Variable Rate

An interest rate that can fluctuate over the duration of a loan or savings account, based on the market or an index.

Preceding August

Indicates a time period or events that occurred before the month of August.