Why is the aggregate demand curve downward sloping?
A) because the more people buy, the fewer additional purchases they need
B) because people buy something else when the price goes up
C) because people feel poorer and buy less when prices go up
D) because the more people wish to consume, the lower the price is

Question

Quizplus · Accepted Answer

When prices go up, people's purchasing power decreases, and they feel poorer. As a result, they tend to buy less. This inverse relationship between price and quantity demanded is reflected in the downward sloping aggregate demand curve.

Why Is the Aggregate Demand Curve Downward Sloping