One Explanation for the Slope of the Aggregate Demand Curve

question 20

Multiple Choice

One explanation for the slope of the aggregate demand curve is that:

• A)nominal income falls and so does the demand for goods and services as prices rise.
• B)falling prices make people feel poorer and reduce spending.
• C)the government spends less to drive the price level back to normal as prices rise.
• D)businesses increase spending when inflation is high and rising.
• E)domestic goods become more expensive relative to foreign goods when prices rise,reducing exports.

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