One Reason Why the Aggregate Demand (AD)curve Slopes Downward Is

question 88

Multiple Choice

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

• A)increases in the price level cause consumers to substitute foreign goods for domestic goods.
• B)when the price level falls firms must compete more when output increases.
• C)increased production results in lower production costs.
• D)when the price level falls consumers increase their saving rate.
• E)aggregate expenditure increases as the price level rises.

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Definitions:

Unearned Revenues

A liability recorded for cash received before services are performed.

Income Statement

A financial statement that shows a company's revenues and expenses, and ultimately its net income or loss, over a specific period.

Current Maturities

The portion of long-term debt or loan obligations that is due to be paid within the coming fiscal year.

Long-term Debt

Loans or financial obligations that are due for repayment beyond the next 12 months or the current business cycle.