Each of the following factors contribute to the slope of the dynamic aggregate demand curve, except the:
A) strength of the effect of inflation on real balances.
B) current level of technology.
C) extent to which monetary policymakers react to a change in current inflation.
D) size of the response of aggregate expenditures to changes in the interest rate.

Question

Quizplus · Accepted Answer

The current level of technology affects the level of potential output and shifts the aggregate supply curve, not the slope of the dynamic aggregate demand curve. The other factors listed – the strength of the effect of inflation on real balances, the extent to which monetary policymakers react to a change in current inflation, and the size of the response of aggregate expenditures to changes in the interest rate – all affect the slope of the dynamic aggregate demand curve.

Each of the Following Factors Contribute to the Slope of the Dynamic