Which of the following does the downward slope of the aggregate demand curve show?
A)that an increase in the money supply causes the aggregate quantity of goods and services demanded to increase
B)that an increase in the money supply causes the aggregate quantity of goods and services demanded to decrease
C)that an increase in the price level causes the aggregate quantity of goods and services demanded to increase
D)that an increase in the price level causes the aggregate quantity of goods and services demanded to decrease

Question

Quizplus · Accepted Answer

The downward slope of the aggregate demand curve shows that an increase in the price level causes the aggregate quantity of goods and services demanded to decrease. This is because at a higher price level, consumer spending and investment decrease, causing a contraction in the economy. Thus, the aggregate demand curve slopes downward due to the negative relationship between the price level and the quantity of goods and services demanded.

Which of the Following Does the Downward Slope of the Aggregate