Why Does the Aggregate Demand Curve Slope Downward

question 95

Multiple Choice

Why does the aggregate demand curve slope downward?  

• A) because when the price level increases, consumers feel poorer and therefore buy less 
• B) because when the price level increases, consumers feel richer and therefore buy more 
• C) because when domestic prices increase, consumers substitute domestic goods for imported ones 
• D) because when the price of a particular good increases, consumers substitute away from that good

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Definitions:

Reclaim Goods

The process of taking back possession of sold goods by a seller under certain conditions, typically due to nonpayment or breach of contract.

Breach

The violation or failure to observe a legal agreement, law, or obligation.

Specific Performance

is a legal remedy in contract law where a court orders a party to perform their contractual duties, rather than simply paying damages for failing to fulfill the contract.

Seller

A seller is an individual or entity that offers goods or services for sale.