Which of the Following Partly Explains Why the Aggregate Demand

question 116

Multiple Choice

Which of the following partly explains why the aggregate demand curve is negatively sloped?

• A) When the price of cars manufactured in the United States increases, people buy more cars manufactured abroad.
• B) When the price of cars manufactured abroad increases, people buy fewer cars manufactured in the United States.
• C) When the interest rate increases, people borrow more money.
• D) When the interest rate decreases, people borrow less money.

---

Definitions:

Economically Equivalent

A term describing financial items or situations that have the same value or effect when all factors are considered.

Scheduled Payment

A predetermined amount paid at regular intervals under the terms of a loan agreement.

Compounded Semi-annually

An interest calculation method where interest is added to the principal sum twice a year, affecting the total interest earned.

Monthly Payment

The fixed amount of money paid every month over the course of a loan term or to settle a recurring charge.