Other Things Being Equal, the Economy's Aggregate Demand Curve Shows

question 248

Multiple Choice

Other things being equal, the economy's aggregate demand curve shows that

• A) as the price level falls, total planned expenditures fall as well.
• B) a change in the general price level causes the curve to shift.
• C) a change in the general price level causes a change in the quantity of final goods and services purchased.
• D) real Gross Domestic Product (GDP) and the price level are not related.

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Definitions:

Economics

The social science that studies how goods and services are produced, distributed, and consumed, and how individuals, businesses, and governments make choices given limited resources.

Institutions

Structures or mechanisms of social order governing the behavior of a set of individuals within a given community, including laws, norms, and organizations.

Society

An organized group of individuals living together in a structured community with shared laws, traditions, and values.

Economizing Problem

The need to make choices about how to best use limited resources to satisfy unlimited wants.