Asked by Ericka Eldridge on Jun 09, 2024

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The aggregate demand curve of an economy illustrates the relationship between:

A) interest rates and income levels.
B) the price level and real gross domestic product (GDP) .
C) the price level and interest rates.
D) income levels and real gross domestic product (GDP) .
E) real income levels and nominal income levels.

Aggregate Demand Curve

A graphical representation showing the overall demand for all goods and services in an economy at various price levels, typically downward sloping.

Real Gross Domestic Product

An inflation-adjusted measure that reflects the value of all goods and services produced by an economy in a given year, expressing the total economic output in constant prices.

  • Perceive the connection between changes in price levels and their effects on consumption, export rates, and the overall demand curve.
  • Recognize the contribution of price level to the configuration of aggregate demand and economic expenditure.
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NW
Nicole WooleverJun 13, 2024
Final Answer :
B
Explanation :
The aggregate demand curve shows the relationship between the price level and real GDP. As the price level changes, there is a corresponding change in the quantity of goods and services demanded in the economy, which affects the level of real GDP. The relationship between interest rates and income levels, as well as the relationship between real income and nominal income, are not directly illustrated by the aggregate demand curve.