Which of the Following Explains Why the Aggregate Demand Curve

question 87

Multiple Choice

Which of the following explains why the aggregate demand curve slopes downward?

• A)If the price level increases,we feel poorer and therefore buy less.
• B)If the price level increases,we feel richer and therefore buy more.
• C)If domestic prices increase,we substitute domestic goods for imported ones.
• D)If the price of a particular good increases,we substitute away from that good.
• E)A decrease in the price of a particular good is like an increase in income and therefore we buy more.

---

Definitions:

Balance Sheet Accounts

Accounts that appear on the balance sheet, such as assets, liabilities, and shareholders' equity, reflecting the financial position at a specific point in time.

Adjusting Entries

At the close of an accounting period, entries in accounting records to apportion income and outlays to the actual time they happened.

Prepaid Rent

An expense that represents payment made in advance for the use of property or space, which is recorded as an asset until it is consumed or the rental period elapses.

Adjusting Entries

Entries recorded at the conclusion of an accounting cycle to distribute revenues and expenses to the timeframe in which they were truly incurred.