If there were no real wealth or interest rate effect, the aggregate demand curve would still be downward sloping.

Question

Quizplus · Accepted Answer

The downward slope of the aggregate demand curve is not solely dependent on the real wealth or interest rate effect. Other factors such as the law of diminishing marginal utility, real balance effect, and net export effect also contribute to the downward slope of the aggregate demand curve. Therefore, even if the real wealth or interest rate effect were not present, the aggregate demand curve would still be downward sloping.

If There Were No Real Wealth or Interest Rate Effect