The Aggregate Demand Curve Slopes Downward

question 108

Multiple Choice

The aggregate demand curve slopes downward
I. for the same reasons that an ordinary demand curve does.
II. in part because when the price level falls, the real wealth of the public falls, and this induces people to change their consumption.
III. because as the price level falls, the net export component of aggregate demand increases.

• A) I, II, and III
• B) II and III
• C) II only
• D) III only

---

Definitions:

MRP

Material Requirements Planning, a system for managing manufacturing processes through scheduling and inventory control.

Supermarket

A large-self service retail store offering a wide variety of food and household products, organized into aisles.

Lead-Time Offsets

The time difference or delay between initiating a process and its impact on the supply chain or production schedule, often used to manage inventory levels and production planning.

Time Fences

Policy boundaries within a production schedule that limit the extent to which changes can be made, helping to balance flexibility and stability in operations.