The slope of an aggregate demand curve is determined by
A) the sensitivity of the demand for money to changes in the interest rate.
B) the sensitivity of investment to changes in the interest rate.
C) the sensitivity of the demand for money to changes in GDP.
D) the marginal propensity to consume.
E) all of the above.

Question

Quizplus · Accepted Answer

The slope of an aggregate demand curve is influenced by multiple factors, including the sensitivity of the demand for money to changes in the interest rate (A), the sensitivity of investment to changes in the interest rate (B), the sensitivity of the demand for money to changes in GDP (C), and the marginal propensity to consume (D). All these factors affect how total demand in the economy responds to changes in the price level, which is what the aggregate demand curve represents.

The Slope of an Aggregate Demand Curve Is Determined by