The Most Important Reason for the Slope of the Aggregate-Demand

question 90

Multiple Choice

The most important reason for the slope of the aggregate-demand curve is that as the price level

• A)increases,interest rates increase,and investment decreases.
• B)increases,interest rates decrease,and investment increases.
• C)decreases,interest rates increase,and investment increases.
• D)decreases,interest rates decrease,and investment decreases.

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Definitions:

Demand Increases

A situation where the desire and ability to purchase goods and services in a market rise, often leading to higher prices if supply remains constant.

Supply Decreases

A reduction in the quantity of a good or service that producers are willing to sell at a given price, often resulting in higher prices.

Equilibrium Quantity

The quantity of goods or services that is supplied and demanded at the equilibrium price, where the quantity demanded equals the quantity supplied.

Rent Ceiling

A government-imposed limit on how high rents can go, aimed at keeping housing affordable.