ECONOMICS
AGGREGATE DEMAND
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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The exchange-rate effect
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The wealth effect.
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The classical dichotomy/monetary neutrality effects.
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The interest-rate effect
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Detailed explanation-1: -the interest-rate effectc. the classical dichotomy/monetary neutrality effectsd. the exchange-rate effecte. All of the above are reasons why the aggregate-demand curve slopes downward.…
Detailed explanation-2: -Answer and Explanation: c) The cost effect is the only effect that is not related to the downward sloping aggregate demand curve.
Detailed explanation-3: -The one reason why the aggregate demand curve is downward sloping is the interest rate effect (also known as Keynes interest rate effect).
Detailed explanation-4: -Which of the following explain the reasons for the downward slope of the aggregate demand curve? A higher price level decreases the purchasing power of the publics’ accumulated savings balances.