Which of the Following Helps Explain Why the Aggregate Quantity

question 59

Multiple Choice

Which of the following helps explain why the aggregate quantity demanded of goods and services is inversely related to prices within the framework of the AD/AS model?

• A)As prices fall, domestic consumers have an incentive to buy more of the cheaper goods and services.
• B)As prices fall, the monetary authorities will have to increase the money supply, which will lead to an increase in the quantity of goods and services purchased.
• C)As prices fall, the government will have to reduce taxes, which will lead to an increase in the quantity of goods and services purchased.
• D)As prices fall, the wealth of people holding the fixed quantity of money increases, causing them to expand their purchases of goods and services.

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Definitions:

Case Studies

In-depth analyses of a single event, situation, individual, or group to explore causation in order to find underlying principles.

Unconscious Motivations

The driving forces behind human behaviors, thoughts, and feelings that are not within the individual's conscious awareness.

Psychological Disorder

A Psychological Disorder is a pattern of behavioral, cognitive, or emotional symptoms that impact multiple areas of life, often causing distress or impairment in functioning.

Case Study

An in-depth investigation of a single subject, group, event, or community over a period of time, used in psychological, social, or educational research.