Which of the Following Would Help Explain Why the Aggregate

question 103

Multiple Choice

Which of the following would help explain why the aggregate demand curve slopes downward?

• A)An unexpectedly low price level raises the real wage,which causes firms to hire fewer workers and produce a smaller quantity of goods and services.
• B)A lower price level causes domestic interest rates to rise and the real exchange rate to appreciate,which stimulates spending on net exports.
• C)A higher price level increases real wealth,which stimulates spending on consumption.
• D)A lower price level reduces the interest rate,which encourages greater spending on investment goods.

---

Definitions:

Standard Deviation

A measure of the dispersion of a set of data from its mean, indicating how much variation exists from the average.

Beta

A measurement of the volatility of a security or a portfolio in comparison to the market as a whole, used as a measure of systematic risk.

Treynor Measure

A performance metric for determining how well an investment compensates the investor for taking risk, comparing returns above the risk-free rate to the investment's market risk.

Standard Deviation

A statistical measure that represents the dispersion or variability of a data set, commonly used in finance to quantify the risk of investment returns.