Explain what the aggregate demand curve represents and why it is downward sloping. Give explanations about the aggregate demand curve under each of the two possible assumptions about the central bank's conduct of monetary policy: (1) that the central bank controls the nominal money supply; (2) that the central bank controls the interest rate and has a price target.

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The Answer of Explain what the aggregate demand curve represents and why it is downward sloping. Give explanations about the aggregate demand curve under each of the two possible assumptions about the central bank's conduct of monetary policy: (1) that the central bank controls the nominal money supply; (2) that the central bank controls the interest rate and has a price target.

Explain What the Aggregate Demand Curve Represents and Why It