The AD Curve Slopes Downward Because an Increase in ______

question 96

Multiple Choice

The AD curve slopes downward because an increase in ______ causes ______ to fall, which in turn causes real GDP to fall.

• A)the inflation rate; planned spending
• B)planned spending; the inflation rate
• C)real GDP; planned spending
• D)real GDP; the unemployment rate

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Definitions:

Positive Relationship

A relationship between two variables in which an increase in the value of one variable is associated with an increase in the value of the other variable. It is illustrated by a curve that slopes upward from left to right.

Quantity of Lemonade

The amount of lemonade produced or available for sale at any given time.

Cups Per Day

A measurement unit often used in dietary or consumption studies, indicating the number of cups of a substance (such as coffee or tea) consumed daily.

$1

A unit of currency in the United States, equivalent to 100 cents, represented both as a coin and a paper bill.