The Downward Slope of the Aggregate Demand Curve Is Based

question 117

True/False

The downward slope of the aggregate demand curve is based on logic that as the price level rises, consumption, investment, and net exports all fall.

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Definitions:

Consumption

The action or process of using goods and services for personal use or enjoyment within an economy.

APS

Acronym for Average Propensity to Save, which is the proportion of income which is saved, usually expressed as a percentage of total household income.

Disposable Income

The sum available for household consumption and saving after the reduction of income taxes.

Consumption

The total value of goods and services used by households and non-profit institutions serving households, excluding purchases of dwellings.