Briefly explain why the aggregate expenditure LOADING... line is upward sloping,

Question

Briefly explain why the aggregate expenditure

LOADING...

line is upward sloping, while the aggregate demand

LOADING...

curve is downward sloping.

A.

Aggregate expenditure is the relationship between spending and interest rates, while aggregate demand is a relationship between output and factor inputs.

B.

Aggregate expenditure is the relationship between spending and income, while aggregate demand is a relationship between output and the price level.

C.

Aggregate expenditure allows the price level to vary, while aggregate demand treats prices as a constant.

D.

Aggregate expenditure is the relationship between output and the price level, while aggregate demand is a relationship between spending and income.

Explanation / Answer

B.
Aggregate expenditure is the relationship between spending and income, while aggregate demand is a relationship between output and the price level.

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