The Aggregate Demand Curve Shows

question 20

Multiple Choice

The aggregate demand curve shows

• A) a direct relationship between changes in the price level and changes in real GDP.
• B) real GDP does not change as the price level changes.
• C) an inverse relationship between the price level and real GDP.
• D) an inverse relationship between changes in the price level and changes in nominal GDP.

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Definitions:

Unemployment Rate

The percentage of the labor force that is jobless and actively looking for employment, used as an indicator of the health of an economy.

G.I. Bill

Enacted in 1944, a law that provided various benefits to returning World War II veterans, including educational grants and loan guaranties for homes.

FHA Loans

Mortgages insured by the Federal Housing Administration, designed to help borrowers obtain homes by lowering some of the costs of their mortgage loans.

Baby Boom

The significant increase in the birth rate observed in various countries, particularly in the United States, following World War II, from approximately 1946 to 1964.