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.