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

question 108

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)decreases in the price level cause increases in private-sector wealth which lead to increases in desired consumption.
• 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:

Dams and Highways

Large-scale infrastructure projects that include the construction of barriers across rivers to store water and the building of routes for vehicular traffic across land respectively.

Income of Farmers

Refers to the earnings received by those engaged in agricultural production, reflecting their economic viability and sustainability.

1933-1940

The period marked by global economic struggles, the rise of fascism in Europe, and the lead-up to World War II.

Declined Further

An expression denoting continued deterioration or decrease in quantity, quality, or strength.