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

question 108

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)decreases in the price level cause increases in private-sector wealth which lead to increases in desired consumption.
• 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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Definitions:

Brand Messaging

Communications strategies and tactics used by companies to convey their brand's values, personality, and promises to potential and existing customers.

Competitive Environment

The dynamic external system in which a business competes and functions, including factors such as competitors, customers, and regulations.

Brand Loyal Customers

Refers to consumers who consistently purchase the same brand over alternatives due to satisfaction, trust, or preference.

Price Sensitivity

The extent to which price fluctuations impact the demand for a good or service.