Which of the Following Is True Regarding the Aggregate Demand

question 177

Multiple Choice

Which of the following is true regarding the aggregate demand curve?

• A)It is upward-sloping because production costs rise as real output increases.
• B)It is downward-sloping because production costs decline as real output increases.
• C)It is upward-sloping because at higher output levels total spending is higher.
• D)It is downward-sloping because a lower price means higher real wealth and therefore people will purchase more.
• E)It is downward-sloping because at lower prices total incomes are higher.

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Definitions:

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Opportunity Cost

The value of the next best alternative that must be forgone as a result of choosing one option over another.

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A small, sweet baked treat, often containing flour, sugar, and oil or fat, and possibly containing chocolate chips, nuts, or other ingredients.

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The ability of a country, individual, company or region to produce a good or service at a lower cost per unit than any competitor.