Multiple Choice
Which of the following would result in the greatest rightward shift of the demand curve for good j?
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3. The Market Forces of Supply and Demand
The Demand Curve
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Join thousands of students who trust us to help them ace their exams!Watch the first videoMultiple Choice
In a diagram showing the aggregate demand (AD) and aggregate supply (AS) curves, what does the horizontal axis typically measure?
A
Unemployment rate
B
Interest rates
C
Real GDP or output
D
The price level
Verified step by step guidance1
Understand that in macroeconomic diagrams involving Aggregate Demand (AD) and Aggregate Supply (AS) curves, the axes represent key economic variables that interact to determine overall economic equilibrium.
Recall that the vertical axis typically measures the Price Level, which reflects the average level of prices in the economy.
Recognize that the horizontal axis measures Real GDP or output, which represents the total quantity of goods and services produced in the economy, adjusted for inflation.
Note that other options like Unemployment rate or Interest rates are important economic indicators but are not represented on the axes of the AD-AS diagram.
Therefore, the horizontal axis in an AD-AS diagram typically measures Real GDP or output, showing how total production changes in response to different price levels.
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