2
AssignmentMultiple Choice

Case Study: Starting a Business

Question 2 • * HSA 26-27 Economics

When economists study aggregate supply and aggregate demand, what are they studying?

Answer
A
the supply and demand of a good produced by one company
B
the total supply and demand of goods produced at all price levels
C
the equilibrium price of one good that is produced
D
the reason for a decrease in supply and demand for a specific good

Explanation

Aggregate supply and aggregate demand describe the economy-wide total amount of goods and services supplied and demanded at different overall price levels. Choice B, “the total supply and demand of goods produced at all price levels,” best matches this idea. The other choices focus on a single company or a specific good, rather than the economy as a whole.

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