Which of the following explanations for the negative slope of the AD curve is correct? A fall in the price level,with an unchanged money supply,causes the transactions demand for money to
A) decrease,shifting the MD curve downward,lowering the interest rate and increasing desired investment,causing the AE curve to shift upward.
B) decrease,shifting the MD curve upward,raising the interest rate and increasing desired investment,causing the AE curve to shift upward.
C) increase,shifting the MD curve upward,raising the interest rate and decreasing desired investment,causing the AE curve to shift upward.
D) increase,shifting the MD curve downward,lowering the interest rate and decreasing desired investment,causing the AE curve to shift downward.
E) increase,shifting the MD curve upward,raising the interest rate and decreasing desired investment,causing the AE curve to shift downward.
Correct Answer:
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