Which of the Following Explains Why the Aggregate Demand Curve

question 87

Multiple Choice

Which of the following explains why the aggregate demand curve slopes downward?

• A)If the price level increases,we feel poorer and therefore buy less.
• B)If the price level increases,we feel richer and therefore buy more.
• C)If domestic prices increase,we substitute domestic goods for imported ones.
• D)If the price of a particular good increases,we substitute away from that good.
• E)A decrease in the price of a particular good is like an increase in income and therefore we buy more.

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Definitions:

Materials Price Variance

The difference between the actual cost of materials and the expected cost multiplied by the quantity of materials used.

Unfavorable

A term used to describe a variance or difference that negatively impacts financial performance.

Labor Rate Variance

The difference between the expected cost of labor at standard rates and the actual cost of labor incurred.

Raw Materials Quantity Variance

The difference between the expected amount of raw materials required for production and the actual amount used, evaluated in terms of cost.