The aggregate demand curve slopes downward because at lower price levels the purchasing power of consumers' assets ________ , which ________ real wealth.
A) decreases; decreases
B) increases; increases
C) decreases; increases
D) increases; decreases

Question

Quizplus · Accepted Answer

At lower price levels, the purchasing power of consumers' assets increases, which increases real wealth, leading to higher spending and thus the downward slope of the aggregate demand curve.

The Aggregate Demand Curve Slopes Downward Because at Lower Price