The aggregate demand curve slopes downward because
A)a decrease in the price level decreases the real value of household wealth
B)a decrease in the domestic price level increases imports
C)an increase in the price level leads to a decrease in demand for money,which decreases interest rates
D)a decrease in the domestic price level increases exports
E)none of the above

Question

Quizplus · Accepted Answer

A decrease in the domestic price level makes domestic goods cheaper relative to foreign goods, increasing exports and thus increasing aggregate demand.

The Aggregate Demand Curve Slopes Downward Because