The Intertemporal Substitution Effect of the Price Level on Aggregate

question 380

Multiple Choice

The intertemporal substitution effect of the price level on aggregate demand

• A) is the same as the real wealth effect.
• B) is one reason that the aggregate demand curve has a negative slope.
• C) explains why aggregate demand increases when the amount of money increases.
• D) is one reason that the aggregate demand curve has a positive slope.

---

Definitions:

Parasympathetic Nervous System

A division of the autonomic nervous system responsible for "rest and digest" functions, counterbalancing the sympathetic nervous system's "fight or flight" responses.

Autonomic Nervous System

The part of the nervous system that controls involuntary bodily functions, such as heart rate, digestion, and respiratory rate.

Somatic Nervous System

Part of the peripheral nervous system that handles voluntary control of body movements through the action of skeletal muscles.

Central Nervous System

The part of the nervous system consisting of the brain and spinal cord, which coordinates body activities and processes sensory information.