The answer choices for the blanks areBlank 1: fall, remain the same, riseBlank 2: remain the same, rise, declineBlank 3: international trade, real balance, interest-rate Which of the following are reasons the aggregate demand curve is downward sloping? Check all that apply.O A higher price level decreases consumption through the substitution effect.A higher price level decreases the real value of consumers' assets.A lower price level makes domestically produced goods less expensive than foreign goods.As the aggregate price level rises, the cost of borrowing money will. This phenomenon is known as thecausing the quantity of output demanded toeffect. The following graph shows the aggregate demand curve in a hypothetical economy. Assume that the economy's money supply remains fixed.PRICE LEVEL16015014013011010090800Aggregate DemandAggregate Demand100200 300 400 500 600REAL GDP (Billions of dollars)700800

Answered: The following graph shows the aggregate…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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The answer choices for the blanks are

Blank 1: fall, remain the same, rise

Blank 2: remain the same, rise, decline

Blank 3: international trade, real balance, interest-rate

Which of the following are reasons the aggregate demand curve is downward sloping? Check all that apply.
O A higher price level decreases consumption through the substitution effect.
A higher price level decreases the real value of consumers' assets.
A lower price level makes domestically produced goods less expensive than foreign goods.
As the aggregate price level rises, the cost of borrowing money will
. This phenomenon is known as the
causing the quantity of output demanded to
effect.

The following graph shows the aggregate demand curve in a hypothetical economy. Assume that the economy's money supply remains fixed.
PRICE LEVEL
160
150
140
130
110
100
90
80
0
Aggregate Demand
Aggregate Demand
100
200 300 400 500 600
REAL GDP (Billions of dollars)
700
800

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$T h e A g g r e g a t e D e m a n d c u r v e i n a h y p o t h e t i c a l e c o n o m y T h e m o n e y s u p p l y i n t h e e c o n o m y r e m a i n s f i x e d .$

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