Final answer:
The correct statement is that the quantity of real GDP demanded is the sum of real consumption expenditure, investment, government expenditure, and net exports. It corresponds to the components of aggregate demand in the aggregate demand curve, which slopes downward due to effects like the wealth effect and the interest rate effect.
Step-by-step explanation:
The correct statement among the options provided is B: The quantity of real GDP demanded is the sum of the real consumption expenditure, investment, government expenditure, and exports minus imports. This definition aligns with the components of aggregate demand which are consumption spending (C), investment spending (I), government spending (G), and spending on exports (X) minus imports (M): C + I + G + X - M.
The aggregate demand curve slopes downward for several reasons, including the wealth effect, the interest rate effect, and the foreign price effect. A higher price level leads to a decrease in the quantity of total spending because people feel poorer (wealth effect), borrow less and save more due to higher interest rates (interest rate effect), and foreign buyers purchase fewer domestic goods as they become more expensive relative to foreign goods (foreign price effect).