The aggregate demand curve slopes downward in part due to:
A)the negative relationship between the price level and net exports.
B)the positive relationship between the price level and exports.
C)the negative relationship between the price level and imports.
D)All of these are true.

Question

Quizplus · Accepted Answer

The negative relationship between the price level and net exports is one of the reasons why the aggregate demand curve slopes downward. As the price level increases, exports become more expensive, leading to a decrease in net exports. This results in a decrease in aggregate demand. Additionally, as the price level increases, imports become relatively cheaper, leading to an increase in imports and a decrease in aggregate demand. Therefore, choices B and C are not correct, and D is not necessarily correct as it includes option B and C, which are not true.

The Aggregate Demand Curve Slopes Downward in Part Due To