The Aggregate Demand Curve May Be Derived from the IS-LM

question 64

Multiple Choice

The aggregate demand curve may be derived from the IS-LM analysis by shifting

• A)the IS curve as the price changes.
• B)the real money supply and thus LM curve for each new price level.
• C)both the LM and IS curves since the real money supply and real expenditures change when P changes.
• D)the LM rightward when P increases to define Y.

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Definitions:

Problem Recognition

The initial step in the buying process, where a consumer identifies a need or problem that requires a solution.

Information Search

The process by which consumers gather details about products, services, and other relevant information to make an informed purchase decision.

Vendor Ratings

Refers to evaluations or assessments of a vendor's performance, quality, reliability, and value by customers or industry analysts.

Derived Demand

The demand for a good or service that arises from the demand for another good or service, as seen in supply chain relationships.