Question

Which of the following are reasons the aggregate demand curve is downward sloping? Check all that apply.

a.A lower price level increases the consumption of complementary goods.
b. A lower price level increases the real value of consumers' assets.
c. A higher price level leads to a higher interest rate.

Answer 1

The correct answer is B

Step-by-step explanation:

Aggregate demand curve states the number of demands for the goods and services at different price levels. The demand curve which is downward states that with the dropping or decrease in the price level of a commodity, leads to increase in demand.

There are 3 reasons for the aggregate demand curve is downward sloping. and the reasons are interest-rate effect,net exports effect and wealth effect.