One reason that the aggregate demand curve has a negative slope is because
A) The premise of the question is wrong because the aggregate demand curve has a positive slope.
B) people buy fewer goods and save more when the price level rises because their real wealth decreases.
C) firms produce more when the price rises.
D) people earn more money when output rises.

Question

Quizplus · Accepted Answer

As the price level rises, the purchasing power of consumers' money decreases, leading them to buy fewer goods and save more. This decrease in consumption leads to a decrease in aggregate demand, causing the negative slope of the aggregate demand curve.

One Reason That the Aggregate Demand Curve Has a Negative