One of the Reasons Why the Aggregate Demand (AD)curve Slopes

question 25

Multiple Choice

One of the reasons why the aggregate demand (AD) curve slopes downward is that

• A)aggregate expenditure increases as the price level rises.
• B)increases in the price level cause consumers to substitute foreign goods for domestic goods.
• C)increased production results in lower production costs.
• D)when the price level falls firms must be more competitive when output increases.
• E)when the price level falls consumers increase their saving rate.

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