The aggregate demand curve is downward-sloping because,other things being equal,
A)People buy fewer goods and services at lower average incomes.
B)People buy more goods and services at lower average prices.
C)A higher average price level will induce producers to offer more output than otherwise.
D)People buy more goods and services at higher average prices.

Question

Quizplus · Accepted Answer

The downward slope of the aggregate demand curve is due to the inverse relationship between the price level and real output demanded. When the average prices of goods and services decrease, people tend to buy more, leading to an increase in the economy's real output.

The Aggregate Demand Curve Is Downward-Sloping Because,other Things Being Equal