The Aggregate Demand Curve Slopes Downward Because of

question 378

Multiple Choice

The aggregate demand curve slopes downward because of

• A) the multiplier.
• B) the MPC.
• C) wealth and substitution effects.
• D) import and taxation effects.

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Definitions:

Absolute Advantage

Refers to the ability of a country, individual, or firm to produce more of a good or service with the same amount of resources than competitors.

Economies of Scale

Refer to the cost advantages that enterprises obtain due to their scale of operation, with cost per unit of output generally decreasing with increasing scale.

Domestic Price

The price of goods or services within a country's borders, influenced by local supply and demand conditions.

World Price

the international market price of a good or service, influenced by worldwide demand and supply conditions.