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One Explanation for the Slope of the Aggregate Demand Curve

Question 20

Multiple Choice

One explanation for the slope of the aggregate demand curve is that:


A) nominal income falls and so does the demand for goods and services as prices rise.
B) falling prices make people feel poorer and reduce spending.
C) the government spends less to drive the price level back to normal as prices rise.
D) businesses increase spending when inflation is high and rising.
E) domestic goods become more expensive relative to foreign goods when prices rise,reducing exports.

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