Degree of Excess Capacity Answer the question based on the accompanying list of factors that are related to the aggregate demand curve.Which of the factors best explain the downward slope of aggregate demand curve?
A)2, 4, and 6
B)7, 9, and 10
C)1, 3, and 8
D)4, 6, and 7

Question

Quizplus · Accepted Answer

The downward slope of the aggregate demand curve is best explained by the wealth effect (1), the interest rate effect (3), and the exchange rate effect (8). These factors describe how changes in the price level affect consumption, investment, and net exports, leading to a downward-sloping aggregate demand curve.

Degree of Excess Capacity Answer the Question Based on the Accompanying