Which of the Following Correctly Describes One Reason Why the Aggregate

question 59

Multiple Choice

Which of the following correctly describes one reason why the aggregate demand (AD) curve slopes downward?

• A)Aggregate expenditure increases as the price level rises,which leads to a rise in real GDP.
• B)Increases in the price level cause consumers to substitute foreign goods for domestic goods,which leads to a rise in real GDP.
• C)The increase in total output associated with the fall in the price level results in lower production costs.
• D)When the price level falls,firms must be more competitive when output increases.
• E)When the price level falls,consumers increase their saving rate.

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Definitions:

Portfolio Beta

An indicator of the level of fluctuation, or inherent risk, within an investment portfolio relative to the overall market.

Overall Market

Refers to the aggregated performance of all investment assets or stocks within a particular market or index.

Greater Than One

A mathematical condition indicating that a number or quantity is larger than the value of one.

Risky Asset

An asset whose returns can vary considerably and are not predictable, presenting a higher chance of loss.