The downward slope of the aggregate demand curve is due to ________ and ________.
A) planned investment spending; net exports
B) planned investment spending; financial frictions
C) net exports; financial frictions
D) financial frictions; net transfers

Question

Quizplus · Accepted Answer

The downward slope of the aggregate demand curve is primarily due to the wealth effect and the interest rate effect, which are not explicitly listed among the options. However, planned investment spending and net exports are components that can influence aggregate demand, making option A the closest match despite the question's phrasing not directly aligning with standard economic explanations for the aggregate demand curve's slope.

The Downward Slope of the Aggregate Demand Curve Is Due