The U.S. aggregate demand curve is downward sloping because
a. an increase in the U.S. price level causes an increase in U.S. spending on consumption goods
b. at lower U.S. price levels, real wealth decreases, causing a decrease in the quantities of U.S. goods and services demanded
c. at lower U.S. price levels, interest rates decrease, causing a decrease in the quantities of U.S. goods and services demanded
d. at lower price levels in the U.S., U.S. exports become more attractive abroad, the demand for them increases, causing an increase in the quantities of U.S. goods andservices demanded
e. increases in the U.S. price level do not affect American's real wealth
D
You might also like to view...
Suppose you are given the following demand data for a product.PriceQuantity Demanded$1030940850760670The price elasticity of demand (based on the midpoint formula) when price increases from $8 to $10 is
A. -.63. B. -2.25. C. -1.60. D. -1.16.
According to proponents of the interest-rate-based monetary policy transmission mechanism, any increase in the money supply
A) causes velocity to increase, and so in the short run nominal Gross Domestic Product (GDP) must increase. B) will increase Gross Domestic Product (GDP) only if interest rates fall and investment is sensitive to decreasing interest rates. C) is effective in increasing Gross Domestic Product (GDP) only if it causes an outward shift of the aggregate supply curve. D) will move the economy from the "liquidity trap" during times of recession if interest rates fall enough to stimulate private investment.
In the above figure, flow B represents households' ________
A) income B) consumption expenditures C) saving D) investment
The United States does not impose tariffs or quotas; however, many of its trading partners do have these trade restrictions
a. True b. False