Final answer:
The AD/AS model is usually better than the AE model for explaining the relationship between rising price levels and GDP due to its comprehensive approach, considering the entire economy's supply and demand. The choice of data grouping depends on the analysis goal, potentially highlighting seasonal or long-term trends.
Step-by-step explanation:
Choosing between the AD/AS model and the AE model often depends on what aspect of the economy one is attempting to understand. The AD/AS model better explains the relationship between rising price levels and GDP because it incorporates the effects of supply and demand across the whole economy, not just the aggregate expenditures component.
When evaluating data patterns, whether they be horizontal, seasonal, or trend patterns, it's important to consider the context of the data. For example, a seasonal pattern would be evidenced by fluctuations that correspond to specific times of the year, such as retail sales increases during the holiday season.
Data grouping can be subjective and depends on the purpose of the analysis. There might be advantages to different grouping methods based on the intended use of the data. For instance, grouping by quarters might show seasonal trends, while grouping by years could reveal long-term trends.