The Downward Slope of the Aggregate-Demand Curve Shows That

question 53

Multiple Choice

The downward slope of the aggregate-demand curve shows that:

• A)a fall in the price level reduces the overall quantity of goods and services demanded
• B)a rise in the price level increases the overall quantity of goods and services demanded
• C)a fall in the price level has no effect on the overall quantity of goods and services demanded
• D)a fall in the price level increases the overall quantity of goods and services demanded

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Definitions:

Production Level

The quantity of goods or services that a company produces within a given period, often directly affecting revenues and profitability.

Capital Intensity Ratio

A measure of how much capital is needed in relation to labor to produce a given level of output.

Operating Capacity

The maximum output a company can produce using its resources efficiently under normal conditions.

Net Fixed Assets

The value of a company’s property, plant, and equipment minus any depreciation that has been accounted for.