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90 80 0 100 200 300 400 500 600 700 800 REAL GDP (Billions of dollars) Which of the following are reasons the aggregate demand curve is downward sloping? Check all that apply. A lower price level leads to a lower interest rate. A higher price level decreases consumption through the substitution effect. A higher price level makes domestically produced goods more expensive than foreign goods. As the aggregate price level rises, the purchasing power of households' saving balances will demanded to This phenomenon is known as the causing the quantity of output effect. PRICE LEVEL 160 Aggregate Demand Aggregate Demand 150 140 130 120 110 100 90 80 Q + + + + 100 200 300 400 500 600 700 800 REAL GDP (Billions of dollars)

90 80 0 100 200 300 400 500 600 700 800 REAL GDP (Billions of dollars) Which of the following are reasons the aggregate demand curve is downward sloping? Check all that apply. A lower price level leads to a lower interest rate. A higher price level decreases consumption through the substitution effect. A higher price level makes domestically produced goods more expensive than foreign goods. As the aggregate price level rises, the purchasing power of households' saving balances will demanded to This phenomenon is known as the causing the quantity of output effect. PRICE LEVEL 160 Aggregate Demand Aggregate Demand 150 140 130 120 110 100 90 80 Q + + + + 100 200 300 400 500 600 700 800 REAL GDP (Billions of dollars)

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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90 80 0 100 200 300 400 500 600 700 800 REAL GDP (Billions of dollars) Which of the following are reasons the aggregate demand curve is downward sloping? Check all that apply. A lower price level leads to a lower interest rate. A higher price level decreases consumption through the substitution effect. A higher price level makes domestically produced goods more expensive than foreign goods. As the aggregate price level rises, the purchasing power of households' saving balances will demanded to This phenomenon is known as the causing the quantity of output effect.
Transcribed Image Text:90 80 0 100 200 300 400 500 600 700 800 REAL GDP (Billions of dollars) Which of the following are reasons the aggregate demand curve is downward sloping? Check all that apply. A lower price level leads to a lower interest rate. A higher price level decreases consumption through the substitution effect. A higher price level makes domestically produced goods more expensive than foreign goods. As the aggregate price level rises, the purchasing power of households' saving balances will demanded to This phenomenon is known as the causing the quantity of output effect.
PRICE LEVEL 160 Aggregate Demand Aggregate Demand 150 140 130 120 110 100 90 80 Q + + + + 100 200 300 400 500 600 700 800 REAL GDP (Billions of dollars)
Transcribed Image Text:PRICE LEVEL 160 Aggregate Demand Aggregate Demand 150 140 130 120 110 100 90 80 Q + + + + 100 200 300 400 500 600 700 800 REAL GDP (Billions of dollars)
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