By Looking at Aggregate Demand Via Its Component Parts,we Can

question 17

Multiple Choice

By looking at aggregate demand via its component parts,we can conclude that the aggregate demand curve is downward sloping because

• A)a lower inflation rate causes the real interest rate to fall,and stimulates planned investment spending.
• B)a lower inflation rate causes the real interest rate to rise,and stimulates planned investment spending.
• C)a higher inflation rate causes the real interest rate to fall,and stimulates planned investment spending.
• D)a higher inflation rate causes the real interest rate to rise,and stimulates planned investment spending.

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Definitions:

Deadweight Loss

A loss of economic efficiency that occurs when the equilibrium for a good or a service is not achieved or is unattainable.

Graphically Depict

To represent data or information visually using charts, graphs, or other pictorial forms.

Deadweight Loss

The loss of economic efficiency that can occur when the free market equilibrium for a good or a service is not achieved or is distorted by external intervention.

Taxation

The process by which governments charge fees on individuals and corporations to finance government spending and activities.