One explanation for the slope of the aggregate demand curve is that:
A)nominal income falls and so does the demand for goods and services as prices rise.
B)falling prices make people feel poorer and reduce spending.
C)the government spends less to drive the price level back to normal as prices rise.
D)businesses increase spending when inflation is high and rising.
E)domestic goods become more expensive relative to foreign goods when prices rise,reducing exports.

Question

Quizplus · Accepted Answer

As prices rise, domestic goods become more expensive relative to foreign goods, leading to a decrease in exports, which contributes to the downward slope of the aggregate demand curve.

One Explanation for the Slope of the Aggregate Demand Curve