The Aggregate Demand Curve Shows the Relationship Between Planned Purchases

question 276

Multiple Choice

The aggregate demand curve shows the relationship between planned purchases of

• A) all final goods and services and interest rates.
• B) all final goods and services and the price level.
• C) all final goods and services and nominal GDP.
• D) all final goods and services and total planned production.

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Definitions:

System 2

A term often used in behavioral economics, referring to slow, deliberative, and analytical thinking, contrasted with fast, instinctive, and emotional 'System 1' thinking.

Neoclassical Assumption

Underlying principles of neoclassical economics that include rationality, individuals maximizing utility, firms maximizing profits, and markets tending toward equilibrium.

Rational Behavior

Human behavior based on comparison of marginal costs and marginal benefits; behavior designed to maximize total utility. See rational.

Cognitive Biases

Systematic patterns of deviation from norm or rationality in judgment, whereby inferences about other people and situations may be drawn in an illogical fashion.