Multiple Choice
Which of the following best explains the slope of the AD curve?
A) A change in inflation causes the real interest rate to change, which results in a change in spending.
B) A change in potential GDP causes the rate of inflation to change, which leads to a change in the real interest rate.
C) A change in the real interest rate causes the rate of inflation to change, which results in potential GDP changing.
D) A change in real GDP causes potential GDP to change, which results in the rate of inflation changing.
E) A change in inflation causes spending to change, which causes a change in the real interest rate.
Correct Answer:

Verified
Correct Answer:
Verified
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