What Does the Downward Slope of the Aggregate-Demand Curve Show

question 194

Multiple Choice

What does the downward slope of the aggregate-demand curve show?

• A) that an increase in the money supply causes the aggregate quantity of goods and services demanded to increase
• B) that an increase in the money supply causes the aggregate quantity of goods and services demanded to decrease
• C) that an increase in the price level causes the aggregate quantity of goods and services demanded to increase
• D) that an increase in the price level causes the aggregate quantity of goods and services demanded to decrease

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Definitions:

Capital Stock

Represents the original investment in a company by its owners or shareholders, indicated through the issuance of shares.

Treasury Stock

Shares that were once a part of the outstanding shares but were later repurchased by the company and held in its own treasury.

Common Stock

Equity securities that represent ownership in a corporation, giving holders voting rights and a share in the company's profits through dividends.

Market Price

The current price at which an asset or service can be bought or sold in a public marketplace.