Answer to Question #109347 in Macroeconomics for Philip

Question #109347

A. Which of the following best describes the relationship illustrated between the aggregate demand (AD) curve? 1. the inverse relationship between price and quantity demanded for any product. 2. the negative relationship between the price level and levels of total production. 3. it shows no relationship between the price level and real GDP demanded. 4. the inverse relationship between the price level and real output demanded.
B. Aggregate spending will increase if... 1. real wealth falls. 2. interest rate falls. 3. consumption falls. 4. investment falls.

Expert's answer

4) Aggregate demand curve is the inverse relationship between the price level and real output demanded.

2) Aggregate spending incrase if interest rate fall