A change in the price level _____ the aggregate expenditure curve and _____ the aggregate demand curve.
A. shifts; shifts
B. has no effect on; results in a movement along
C. results in a movement along; results in a movement along
D. results in a movement along; shifts
E. shifts; results in a movement along
The demand posed by the entire economy is referred to as the aggregate demand. It comprises of demand for all kinds of goods and services produced in the economy. As this curve represents the entire economic demand against the prevailing price levels, it has a negative slope.
Answer and Explanation: 1
The correct option is E. shifts; results in a movement along
The aggregate expenditure is composed of consumption, investment, government, and net...
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fromChapter 7 / Lesson 3
Understand the aggregate demand-aggregate supply model and its features. Read more about the curve shifts of this and learn the AD-AS model through an example.