One of the Reasons Why the AD Curve Slopes Downward

question 163

Multiple Choice

One of the reasons why the AD curve slopes downward is that as the

• A) price level rises,purchasing power rises.
• B) price level falls,purchasing power rises.
• C) nation's income level rises,purchasing power rises.
• D) nation's income level rises,purchasing power falls.
• E) This is a trick question,because the AD curve is upward sloping.

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Definitions:

Demand Curve

A graphical representation showing the relationship between the price of a goods or services and the quantity demanded.

Substitutes

Products or services that can be used in place of each other, satisfying the same needs or wants of the consumer.

Monopolist

A single seller in a market who has significant control over the entire supply of a good or service, and thus can influence price.

Marginal Revenue

The additional income generated from selling one more unit of a product or service.