Q1

2. An introduction to the ADAS model The aggregate demand and aggregate supply model is a useful simplification of the macroeconomy used to explain short-run fluctuations in economic activity around its long-run trend. The horizontal axis of a diagram of the aggregate demand and aggregate supply curves measures which of the following? 0 An economy's price levei An economy's real GDP 0 The amount of a particuiar representative good produced in the economy 0 The price of a particular representative good produced in the economy Which of the following are reasons that the aggregate demand curve slopes downward? Check ah' that apply. C As the price level rises, imports become reiativeiy cheaper than domestically produced goods. C As the price level rises, imports become reiativeiy more expensive than domestically produced goods. C As the price level rises, households' real wealth decreases