One of the Reasons Why the Aggregate Demand (AD)curve Slopes

question 25

Multiple Choice

One of the reasons why the aggregate demand (AD) curve slopes downward is that

• A)aggregate expenditure increases as the price level rises.
• B)increases in the price level cause consumers to substitute foreign goods for domestic goods.
• C)increased production 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:

Perceptual Processing

The act of receiving, organizing, and interpreting sensory information from the environment.

Uniform Parts

Elements or components that are identical in form or function within a larger system or group.

Reversible

Capable of being turned back to the previous state or condition without causing permanent change or damage.

Figure-Ground Patterns

The organization of visual fields into objects (the figures) that stand out from their surroundings (the ground).