The Best Explanation of Why the Aggregate Demand Curve Has

Multiple Choice

The best explanation of why the aggregate demand curve has a negative slope is that

A) at a higher price level households cut back on their spending on goods and services.
B) at a higher price level business firms wish to produce more goods and services.
C) a higher price level results in lower real balances and a higher real interest rate.
D) a higher price level results in less government spending on transfers, such as unemployment insurance and social security payments.