Which of the Following Is an Explanation for the Negative

question 34

Multiple Choice

Which of the following is an explanation for the negative slope of the aggregate demand curve?  

• A) because as prices rise nominal income falls and so does the demand for real goods and services 
• B) because as prices rise government spends less to drive the price level back down 
• C) because businesses increase spending when inflation is high and rising 
• D) because as prices rise domestic goods become more expensive relative to foreign goods, which reduces exports

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