Multiple Choice
Which of the following helps explain why the AD curve is downward sloping?
A) If consumers and businesses expect higher prices in the future, they will purchase more today, increasing investment and consumption expenditure.
B) When the price level falls, the real value of wealth rises, so people save less and consume more.
C) If the exchange rate falls and the price level does not change, exports increase and imports decrease.
D) None of the above answers is correct.
Correct Answer:
Verified
Correct Answer:
Verified
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