Economics Aggregate Demand And Supply Questions Medium
The aggregate demand curve represents the total demand for goods and services in an economy at different price levels. It shows the relationship between the overall level of prices in the economy, measured by the price level, and the total quantity of goods and services demanded, measured by real GDP (gross domestic product). The aggregate demand curve is downward sloping, indicating that as the price level decreases, the quantity of goods and services demanded increases, and vice versa. This is because as prices decrease, consumers and businesses are more willing and able to spend, leading to an increase in overall demand. Factors that can shift the aggregate demand curve include changes in consumer spending, investment, government spending, and net exports.