There Are Several Reasons Why the Aggregate Demand Curve Is

question 84

Multiple Choice

There are several reasons why the aggregate demand curve is downward sloping.Which of the following correctly describes one of these explanations?

• A) A rise in the price level raises the purchasing power wealth and increases desired consumption.
• B) A rise in the price level raises interest rates and increases investment spending.
• C) A fall in the price level, holding foreign prices and the exchange rate constant, increases net exports.
• D) A rise in the price level lowers the interest rate and increases investment spending.

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Definitions:

Materials Purchased

The total cost of raw materials bought by a company for the purpose of production in a given period.

Materials Requisitioned

The process or document used to request and authorize the release of materials from the inventory for production or other uses.

Production Department

A segment of a business that is responsible for the manufacture of goods.

Factory Overhead

All manufacturing costs that are not directly attributable to the product being manufactured, including indirect labor and materials.