Which of these statements correctly explains the shape of the aggregate demand curve?
a. As prices fall, nominal income rises and so does the demand for real goods and services
b. Rising prices reduce people's wealth and thereby decrease spending.
c. With falling prices, government decides to spend less to increase the price level.
d. Businesses increase investment spending in response to higher interest rates caused by inflation.
e. As prices fall, domestically produced goods become more expensive relative to foreign goods, resulting in an increase in production.
b
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When the value of a currency is determined mostly by demand and supply, but with occasional government intervention, the exchange rate system is defined as
A) floating. B) fixed. C) Bretton Woods. D) managed float.
The rate of interest that you pay on a home loan depends upon all of the following EXCEPT
A) the supply of houses in the real estate market. B) the length of the loan. C) your credit rating. D) handling charges or loan fees.