Which of the following is true about the aggregate demand curve in the short run;
Choose the correct option:
Answer & explanation
Correct answer: option 3
The upward-sloping aggregate demand curve demonstrates a positive relationship between income level and overall expenditure in the economy. The curve makes a positive intercept with the Y-axis due to autonomous consumption. Autonomous consumption is consumption at a zero level of income. It refers to expenses a consumer must pay regardless of income. This includes necessities like housing and food, which are considered needs, not wants.