Which of these statements correctly explains the shape of the aggregate demand curve?
A) As prices fall,nominal income rises and so does the demand for real goods and services.
B) Rising prices reduce people's wealth and thereby decrease spending.
C) With falling prices,government decides to spend less to increase the price level.
D) Businesses increase investment spending in response to higher interest rates caused by inflation.
E) As prices fall,domestically produced goods become more expensive relative to foreign goods,resulting in an increase in production.
Correct Answer:
Verified
Q44: The aggregate demand curve reflects:
A)a direct relationship
Q45: Which of these is the most likely
Q46: Which of these is a likely consequence
Q47: The value of a country's final goods
Q48: A rise in the price level will:
A)cause
Q50: The aggregate supply curve represents:
A)the quantity of
Q51: The aggregate demand curve for an economy
Q52: Which of these is a coincident economic
Q53: Economic activities that signal forthcoming changes in
Q54: As the price level increases,the amount of
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents