The Dynamic Aggregate Demand Curve Is Downward Sloping Because as Inflation

Multiple Choice

The dynamic aggregate demand curve is downward sloping because as inflation falls, the central bank reduces the nominal interest rate by more than the fall in the inflation rate, which _____the real interest rate and _____ the quantity of goods and services demanded.

A) decreases; decreases
B) decreases; increases
C) increases; increases
D) increases; decreases