One Explanation for the Slope of the Aggregate Demand Curve

question 20

Multiple Choice

One explanation for the slope of the aggregate demand curve is that:

• A)nominal income falls and so does the demand for goods and services as prices rise.
• B)falling prices make people feel poorer and reduce spending.
• C)the government spends less to drive the price level back to normal as prices rise.
• D)businesses increase spending when inflation is high and rising.
• E)domestic goods become more expensive relative to foreign goods when prices rise,reducing exports.

Define and calculate opportunity costs in various economic scenarios.

Analyze the effects of high transaction costs on the number of exchanges and market efficiency.

Recognize how opportunity costs influence individual and business decisions.

Evaluate the impact of transaction costs on specialization and the law of comparative advantage.

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Definitions:

Technology

The use of scientific understanding for real-world applications, particularly in the fields of industry and daily activities.

Flash Mob

A large group of people who assemble suddenly in a public place, perform an unusual act for a brief time, then quickly disperse, often organized via telecommunications or social media.

Conglomeration

The process or result of forming a large company or group of companies by merging multiple small ones, often across various industries.

Merger

The legal combination of two companies, usually in order to maximize efficiency and profits by eliminating redundant infrastructure and personnel.