Why does aggregate demand slope downward (negatively) according to - ProProfs Discuss
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Why does aggregate demand slope downward (negatively) according to the wealth effect?



A. Lower prices increase the value of money holdings and consumer spending increases
B. Lower prices decrease the value of money holdings and consumer spending decreases
C. Lower prices reduce money holdings, increase lending, interest rates fall, and investment spending increases
D. Lower prices increase money holdings, decrease lending, interest rates rise, and investment spending falls

This question is part of Macroeconomics [Ch. 2
Asked by Emy_, Last updated: Feb 01, 2019

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2 Answers

ammara mumtaz

Ammara mumtaz

Answered on Nov 13, 2017

D. Lower prices increase money holdings, decrease lending, interest rates rise

 Reply

Emy_

Emy_

Answered on Oct 10, 2017

Lower prices increase the value of money holdings and consumer spending increases
 Reply

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