All of the Following Are Reasons for the Downward-Sloping Aggregate

question 37

Multiple Choice

All of the following are reasons for the downward-sloping aggregate demand curve except

• A) as the price level decreases, the quantity demanded of real GDP decreases because goods and services are more expensive.
• B) as the price level increases, the real value of household wealth declines, reducing consumption.
• C) a higher price level increases the demand for money, causing an increase in the interest rate which reduces spending on investment goods and consumer durables.
• D) if the price level rises in a country relative to price levels in other countries, net exports will decrease in the original country.

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Definitions:

Noncash Investing

Transactions involving investments that do not require an initial cash outlay, such as stock-for-stock mergers or asset swaps.

Financing Activities

Transactions and events where cash is raised or repaid to fund the company’s operations or to acquire assets, typically reflected in the financing section of a cash flow statement.

Treasury Stock

Shares that were issued and subsequently reacquired by the issuing company, reducing the amount of outstanding stock on the open market.

Income Statement

A financial statement that reports a company's revenues, expenses, and net income over a specific period, indicating financial performance.