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The aggregate demand curve slopes downward indicating that:
a. an increase in the general price level will increase the aggregate quantity of goods and services demanded.
b. consumers substitute between domestic-made and foreign-made goods as their relative prices change.
c. a change in the interest rate will alter the aggregate quantity of goods and services demanded.
d. an increase in the general price level will reduce the aggregate quantity of goods and services demanded.

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Sonia Dhawan
Sonia DhawanLv10
22 Nov 2020
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Related questions

What is aggregate demand?

  1. What is Aggregate Demand?

    1. Aggregate Demand refers to the total expenditure on domestic goods and services within an economy. The Aggregate Demand (AD) thus represents the relationship between the total quantity of output demanded in the economy and the overall price level. Like the basic demand curve, the AD curve also slopes downward to reflect the inverse relationship between aggregate price and aggregate quantity demanded.

According to the foreign purchases effect,Ā  prices in the United States and prices in other countries remain stable, without a corresponding adjustment in exchange rates

A. U.S. consumers will buy more foreign goods and services, and imports will fall foreigners will buy fewer goods and services produced in the United States, and exports will increase. The number of net exports will fall increasing the quantity of real GDP demanded, resulting in a downward sloping aggregate demand curve.

B. U.S. consumers will buy more foreign goods and services, and imports will rise, foreigners will buy fewer goods and services produced in the United States, and exports will fall. The number of net exports will fall, reducing the quantity of real GDP demanded, resulting in a downward sloping aggregate demand curve..

C. U.S. consumers will buy fewer foreign goods and services, and Imports will rise foreigners will buy more goods and services produced in the United States, and exports will fall. The number of net exports will rise, reducing the quantity of real GDP demanded, resulting in a downward sloping aggregate demand curve.

D. U.S. consumers will buy more foreign goods and services, and Imports will fall foreigners will buy fewer goods and services produced in the United States, and exports will rise. The number of net exports will rise, reducing the quantity of real GOP demanded, resulting in a downward sloping aggregate demand curve.

Which of the following sequences best explains the negative slope of the aggregate-demand curve?
a. price level demand for money Ā  equilibrium interest rateĀ  quantity of goods and services demandedĀ 
b.Ā price levelĀ Ā  demand for money Ā Ā  equilibrium interest rate Ā quantity of goods and services demandedĀ 
c.Ā price level Ā Ā demand for moneyĀ Ā Ā  equilibrium interest rate Ā quantity of goods and services demanded
d.Ā price level Ā Ā demand for moneyĀ Ā Ā Ā equilibrium interest rateĀ Ā quantity of goods and services demandedĀ 

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