Question

Consider the following sequence of events: price level ↑ ⇒ demand for money ↑ ⇒ equilibrium interest rate ↑ ⇒ quantity of goods and services demanded ↓ Τhis sequence explains why the a. aggregate-demand curve shifts rightward in response to a monetary injection. b. aggregate-demand curve shifts leftward in response to a monetary injection. c. aggregate-demand curve slopes downward. d. money-supply curve is vertical.

Answer 1

c. aggregate-demand curve slopes downward

Step-by-step explanation:

The aggregate demand curve is graphed on the vertical axis of price level and horizontal axis of aggregate quantity of goods and services in the economy.

The sequence explain how:

• a rise in price level (moving up along vertical axis) leads to
• a decrease in quantity of goods and services demanded (moving left along horizontal axis)

which would translated to a downward sloping aggregate-demand curve