Multiple Choice
There are several reasons why the aggregate demand curve is downward sloping. Which of the following correctly describes one of these explanations?
A) A fall in the price level, holding foreign prices and the exchange rate constant, increases net exports.
B) A rise in the price level raises the purchasing power wealth and increases desired consumption.
C) A rise in the price level lowers the interest rate and increases investment spending.
D) A rise in the price level raises interest rates and increases investment spending.
Correct Answer:
Verified
Correct Answer:
Verified
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