One Reason That the Aggregate Demand Curve Has a Negative

question 129

Multiple Choice

One reason that the aggregate demand curve has a negative slope is that when the domestic price level rises,

• A)firms produce more goods and services.
• B)people substitute toward more imported goods and services.
• C)firms produce fewer goods and services.
• D)people's wealth increases.

---

Definitions:

Fixed Costs

Expenses that do not change with the volume of production or sales and must be paid regardless of the business activity level.

Variable Costs

Expenses that change in proportion to the activity of a business, such as costs for raw materials, energy usage, or labor directly associated with production.

Flash Frozen

A method of freezing food quickly at extremely low temperatures to preserve its quality, nutrients, and taste.

Fixed Costs

Expenses that do not change with the level of production or sales, such as rent, salaries, and equipment leases.