The aggregate demand curve slopes downwards and to the right for the same reasons the demand for peanut butter slopes downwards and to the right.

Question

Quizplus · Accepted Answer

The aggregate demand curve slopes downwards and to the right primarily due to the wealth effect, interest rate effect, and the foreign exchange effect, which are macroeconomic concepts. In contrast, the demand curve for peanut butter slopes downwards due to individual and market-level factors like income effect, substitution effect, and changes in consumer preferences, which are microeconomic concepts.

The Aggregate Demand Curve Slopes Downwards and to the Right