According to the Wealth Effect, Aggregate Demand Slopes Downward (Negatively)

question 41

Multiple Choice

According to the wealth effect, aggregate demand slopes downward (negatively) because lower prices

• A) increase the value of money holdings and consumer spending increases.
• B) decrease the value of money holdings and consumer spending decreases.
• C) reduce money holdings, increase lending, interest rates fall, and investment spending increases.
• D) increase money holdings, decrease lending, interest rates rise, and investment spending falls.

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