What does the downward slope of the aggregate-demand curve show?
A) that an increase in the money supply causes the aggregate quantity of goods and services demanded to increase
B) that an increase in the money supply causes the aggregate quantity of goods and services demanded to decrease
C) that an increase in the price level causes the aggregate quantity of goods and services demanded to increase
D) that an increase in the price level causes the aggregate quantity of goods and services demanded to decrease

Question

Quizplus · Accepted Answer

The downward slope of the aggregate-demand curve shows that an increase in the price level causes the aggregate quantity of goods and services demanded to decrease. This is because higher prices decrease consumers' purchasing power and also increase the cost of production for firms, leading to a reduction in demand for goods and services.

What Does the Downward Slope of the Aggregate-Demand Curve Show