The role of the costs of capital is influenced by the degree to which firms can substitute capital for other inputs of production known as relative prices

Which of the following explains why the AD curve is downward sloping?

a. a lower price level forces the government to reduce taxes, shifting the IS curve to the right and increasing income. b. A lower price level forces the central bank to increase the money supply, shifting the LM curve to the right and increasing income. c. A lower price level increases real money balances, shifting the LM curve to the right and increasing income. d. none of the above are correct.

Up until the early 1880s, there was no federal control over private activities

Indicate whether the statement is true or false