The aggregate demand curve is downward-sloping because,other things being equal,
A)People buy fewer goods and services at lower average incomes.
B)People buy more goods and services at lower average prices.
C)A higher average price level will induce producers to offer more output than otherwise.
D)People buy more goods and services at higher average prices.

Question

Quizplus · Accepted Answer

When prices are lower, people are able to purchase more goods and services due to their increased purchasing power. This means that the quantity demanded of goods and services increases as the average price level decreases. Consequently, the downward-sloping shape of the aggregate demand curve reflects the inverse relationship between the price level and the quantity of goods and services demanded.

The Aggregate Demand Curve Is Downward-Sloping Because,other Things Being Equal