Which of the following is one explanation as to why the aggregate demand curve slopes downward?
A)Decreases in the price level raise the interest rate and increase consumption spending.
B)Decreases in the price level raise the interest rate and increase investment spending.
C)Decreases in the U.S.price level relative to the price level in other countries lower net exports.
D)Decreases in the price level raise real wealth and increase consumption spending.

Question

Quizplus · Accepted Answer

Decreases in the price level increase the purchasing power of consumers' money, which raises real wealth and leads to an increase in consumption spending. This is one reason why the aggregate demand curve slopes downward.

Which of the Following Is One Explanation as to Why