The aggregate demand model is focused on the _________ relationship between tota

Question

The aggregate demand model is focused on the _________ relationship between total spending and _______: A) short run, real GDP B) direct, investment in the overall economy C) long run, real GDP D) consumption, income taxes on individuals The aggregate demand model is focused on the _________ relationship between total spending and _______: A) short run, real GDP B) direct, investment in the overall economy C) long run, real GDP D) consumption, income taxes on individuals A) short run, real GDP B) direct, investment in the overall economy C) long run, real GDP D) consumption, income taxes on individuals

Explanation / Answer

The asnwer is A -) Short run, Real GDP .

The aggregate demand model is focused on the SHORT-RUN relationship between total spending and REAL GDP

because, the macroeconomic aggregate demand assumes that the price level is held constant, it focus on the short run relationship between total spending and real GDP .

we know that real GDP is equal to sum of consumption , investment, goverment spending and nex exports. total spending is the total amount that firms and household are ready to invest at all levels of income and it is defined by the sum of expenditures. or real GDP.

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