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Why Is the Aggregate Demand Curve Downward Sloping

Question 79

Multiple Choice

Why is the aggregate demand curve downward sloping?  


A)  because, as prices fall, nominal income rises and so does the demand for real goods and services. 
B)  because rising prices reduce people's wealth, thereby reducing spending 
C)  because the government decides to spend less to increase the price level 
D)  because, as prices fall, domestically produced goods become more expensive relative to foreign-produced products, which increases production

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