If the money wealth, interest rate, and international effects increase the quantity of aggregate demand by 2 percent when the price falls by 2 percent and the multiplier is 4, then the slope of the aggregate demand curve is:
A)−1/4.
B)−1/2.
C)−1.
D)−4.

Question

Quizplus · Accepted Answer

The slope of the aggregate demand curve is -1/4 because the quantity of aggregate demand increases by 2 percent when the price falls by 2 percent, and the multiplier is 4.

If the Money Wealth, Interest Rate, and International Effects Increase