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:

Socio-emotional Selectivity Theory

A theory that explains how individuals prioritize their social contacts based on their perceived remaining time in life, focusing more on emotionally satisfying relationships as they age.

Worldview

The comprehensive perspective from which individuals view and interpret the world and their place in it.

Well-being

The state of being comfortable, healthy, or happy, encompassing physical, emotional, and psychological wellness.

Frailty

is a condition often associated with aging, characterized by decreased strength, endurance, and physiological function, leading to increased vulnerability.