Part of the explanation for why the aggregate-demand curve slopes downward is that a decrease in the price level
A)decreases the real value of money.
B)increases the real value of the dollar in foreign exchange markets.
C)decreases the interest rate.
D)All of the above are correct.

Question

Quizplus · Accepted Answer

A decrease in the price level reduces the interest rate, which increases investment and consumption, leading to an increase in aggregate demand.

Part of the Explanation for Why the Aggregate-Demand Curve Slopes