Which of the Following Explains Why the AD Curve Is

question 43

Multiple Choice

Which of the following explains why the AD curve is downward sloping?

• A)a lower price level forces the government to reduce taxes,shifting the IS curve to the right and increasing income.
• B)A lower price level forces the central bank to increase the money supply,shifting the LM curve to the right and increasing income.
• C)A lower price level increases real money balances,shifting the LM curve to the right and increasing income.
• D)none of the above are correct.

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Definitions:

Relational

Pertaining to the way in which two or more concepts, objects, or people are connected, especially in a personal or social context.

Relational

Pertaining to or concerning the way in which two or more concepts, objects, or people are connected.

Prospective

Relating to or effective in the future; oriented towards potential developments or occurrences.

Retrospective

An analysis or review of past events, aimed at gaining insights or understanding for future improvements.