The Aggregate Demand (AD)curve Presented in the Textbook Has Its

question 60

Multiple Choice

The aggregate demand (AD) curve presented in the textbook has its particular shape because of which of the following explanations?

• A)an increase in the money supply (M)will cause a reduction in the interest rate,an increase in investment,and an increase in output .
• B)an increase in the aggregate price level (P)will cause an increase in the interest rate and a reduction in output.
• C)an increase in P will cause a reduction in the real wage,an increase in employment,and an increase in output.
• D)as P decreases in a closed economy,goods and services become relatively cheaper and individuals respond by increasing the quantity demanded of goods and services.

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