When plotted with the aggregate price level on the vertical axis and output on the horizontal axis,the aggregate demand curve
A)slopes upward.
B)slopes downward.
C)is vertical.
D)is horizontal.

Question

Quizplus · Accepted Answer

The aggregate demand curve slopes downward due to the wealth effect, interest rate effect, and international trade effect. As the price level increases, consumers' purchasing power decreases, leading to a decrease in consumption spending. This leads to a decrease in overall output and a downward sloping aggregate demand curve.

When Plotted with the Aggregate Price Level on the Vertical