The aggregate demand curve
A) has a negative slope.
B) has a positive slope.
C) is vertical.
D) is horizontal.

Name: The aggregate demand curve A) has a negative slope. B) has a positive slope. C) is vertical. D) is horizontal.
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Question

Quizplus · Accepted Answer

The aggregate demand curve has a negative slope because as the price level decreases, the quantity of goods and services demanded increases, and vice versa. This inverse relationship is due to the wealth effect, interest rate effect, and the foreign exchange effect.

The Aggregate Demand Curve