The aggregate demand curve is downward sloping because a decrease in the price level increases the ________ money supply which ________ interest rates and increases the equilibrium level of aggregate output,everything else held constant.
A)real; lowers
B)real; raises
C)nominal; lowers
D)nominal; raises

Question

Quizplus · Accepted Answer

A decrease in the price level increases the real money supply, which lowers interest rates and increases the equilibrium level of aggregate output, everything else held constant.

The Aggregate Demand Curve Is Downward Sloping Because a Decrease