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Question

Aggregate demand function represents a ________ relationship between the level of output and employment and the aggregate demand price.

A
positive
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B
negative
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C
constant
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D
non-linear
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Solution

The correct option is A positive
Aggregate demand function represents the relation between the level of out produced in an economy to the level of employment in the economy and aggregate demand price where the level of output and level of employment has a direct relationship due to which if one increases then the other one also increases and vice versa as employees directly contribute in the production of output and level of output and demand price have an inverse relationship as level of output increases in the economy then the aggregate demand price decreases due to demand deficiency and vice versa.

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