Which of These Statements Correctly Explains the Shape of the Aggregate

question 89

Multiple Choice

Which of these statements correctly explains the shape of the aggregate demand curve?

• A)As prices fall,nominal income rises and so does the demand for real goods and services.
• B)Rising prices reduce people's wealth and thereby decrease spending.
• C)With falling prices,government decides to spend less to increase the price level.
• D)Businesses increase investment spending in response to higher interest rates caused by inflation.
• E)As prices fall,domestically produced goods become more expensive relative to foreign goods,resulting in an increase in production.

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Definitions:

P(A ∩ B)

The probability of the intersection of events A and B, meaning the likelihood that both A and B occur.

Sample Points

Points selected from a population or a set that are used to conduct statistical analysis or testing.

Numbered Cards

Cards marked with numbers, often used in statistical and probability experiments to simulate random events.

Coin Flip

A simple random experiment or process that results in two possible outcomes, often used to model probability and randomness.