A movement along the AD curve down and to the right is caused by
A) a rightward shift of the money demand curve
B) falling consumer confidence
C) a decreasing price level
D) expansionary open market transactions by the Fed
E) a stable price level and increases in consumption,investment,or government spending

Question

Quizplus · Accepted Answer

A movement along the AD curve represents a change in the quantity of goods and services demanded at different price levels. A decrease in the price level will lead to an increase in real wealth and a decrease in the interest rate, which will both lead to an increase in aggregate demand. Therefore, a movement down and to the right along the AD curve is caused by a decreasing price level.

A Movement Along the AD Curve Down and to the Right