The Aggregate Demand Curve Is Downward Sloping Because a Higher

question 17

Multiple Choice

The aggregate demand curve is downward sloping because a higher inflation rate leads the central bank to raise ________ interest rates,thereby ________ the level of equilibrium aggregate output. ,everything else held constant.

• A)real;lowering
• B)real;raising
• C)nominal;lowering
• D)nominal;raising

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Definitions:

Annual Amortization

The process of spreading the cost of an intangible asset over its useful life on a yearly basis.

Retained Earnings

The portion of net income left over for the business after it has paid out dividends to its shareholders, often reinvested in the business.

Partial Equity Method

An accounting practice used for recording investments, where only part of the investment income is recorded in proportion to ownership, distinct from the full equity method.

Net Income

The total revenue minus expenses, taxes, and costs, representing the profit of a business over a period of time.