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Unformatted text preview: we mean that at arbitrarily given prices, expected quantities demanded are related. On the basis of a demand schedule, as shown below, we can also represent it graphically. CURVE AD Schedule Price level AD quantities or Yr 6 10 5 12 4 18 3 30 2 44 1 60 In the AD Schedule we notice an inverse relationship between level of prices and the quantities or real income . As the price level falls (through 6 to 1) Aggregate Demand goes on increasing (from 10 through 60). In the figure, the same information has been presented graphically (in the form of the AD curve). In the figure price has been measured along the vertical and AD quantity along the horizontal axis. The inverse relation between the two is apparent since the AD curve slopes downwards ....
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This note was uploaded on 11/17/2011 for the course EC ec 201 taught by Professor - during the Fall '10 term at Montgomery.
- Fall '10