Which of the factors below best explain the downward slope of aggregate demand curve? The following list of factors, are related to the aggregate demand curve.Real-balances effect
Household expectations
Interest-rate effect
Personal income tax rates
Profit expectations
National income abroad
Government spending
Foreign trade effect
Exchange rates
Degree of excess capacity
A)2, 4, and 6
B)7, 9, and 10
C)1, 3, and 8
D)4, 6, and 7

Question

Quizplus · Accepted Answer

The real-balances effect, interest-rate effect, and foreign trade effect are key reasons for the downward slope of the aggregate demand curve. These factors explain how changes in the price level affect consumption, investment, and net exports, leading to a downward-sloping aggregate demand curve.

Which of the Factors Below Best Explain the Downward Slope