Question

Which of the following events would cause a movement along the aggregate demand curve​? A. an increase in consumption B. a decrease in the price level C. an increase in net exports D. a decrease in consumption

Answer 1

A. A decrease in price

Step-by-step explanation:

Aggregate demand is the relationship between the total quantity of goods and services demanded and the price level, other factors remaining constant.

The aggregate demand curve is a graphical representation between total quantity of goods demanded and price level.

A demand curve shows the relationship between price and quantity demanded at a point in time. Demand increases with a decrease in price and it decreases with an increase in price. This follows the law of demand which states that " all things being equal, the higher the price; the lower the quantity demanded, the lower the price; the higher the quantity demanded".

A shift or movement along the aggregate demand curve is caused by price.

The shift or movement could be inward or outward caused by increase or decrease.

Answer 2

Answer: A decrease in the price level

Step-by-step explanation:

Movements along the aggregate demand curve is mainly caused by prices. As the price level increases, there is a reduction in th amount of real money supply, which forces the interest rates to increse.

Due to the increase in interest rates, there is reduction in savings and investments, which then lowers the income level for a short period of time. Also, when there is reduction in price levels, the real money supply increases.