Which of the following is a factor which determines the shape of the aggregate demand curve?
A)The real-balance effect
B)The nominal-balance effect
C)The law of diminishing marginal returns
D)The wage effect

Question

Quizplus · Accepted Answer

The real-balance effect is a factor that determines the shape of the aggregate demand curve. As prices decrease, the purchasing power of consumers increases, leading to higher levels of consumer spending and a shift in the aggregate demand curve to the right. The other options listed do not directly relate to the shape of the aggregate demand curve.

Which of the Following Is a Factor Which Determines the Shape