The Wealth Effect Helps Explain the Slope of the Aggregate

Multiple Choice

The wealth effect helps explain the slope of the aggregate demand curve.This effect is

A) relatively important in the United States because expenditures on consumer durables is very responsive to changes in wealth.
B) relatively important in the United States because consumption spending is a large part of GDP.
C) relatively unimportant in the United States because money holdings are a small part of consumer wealth.
D) relatively unimportant because it takes a large change in wealth to make a significant change in interest rates.