The Dynamic Aggregate Demand Curve Has a Negative Slope for All

question 74

Multiple Choice

The dynamic aggregate demand curve has a negative slope for all of the following reasons except:

• A) the reduction in real wealth caused by inflation.
• B) the fact that high rates of inflation are good for the stock market.
• C) the redistribution that occurs as inflation has a greater impact on the poor than it does on the wealthy.
• D) higher current inflation leads policymakers to increase the real interest rate, which depresses various components of aggregate expenditures.

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