Why doesthe aggregate demand curve slope downward? Give at least three reasons andexamples. Identify an event that would shift the AD curve and which directionthe AD curve will shift.

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Why doesthe aggregate demand curve slope downward? Give at least three reasons andexamples. Identify an event that would shift the AD curve and which directionthe AD curve will shift.

Answered Same DayDec 20, 2021

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David answered on Dec 20 2021
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The aggregate demand curve shows the relationship between aggregate price level and aggregate output level of the economy
Why does the aggregate demand curve slope downward? Give at least three reasons and examples. Identify an event that would shift the AD curve and which direction the AD curve will shift.
The aggregate demand curve shows the relationship between aggregate price level and aggregate output level of the economy.
The aggregate demand curve is downward sloping because of the following 3 reasons:
a) Wealth effect: as price level increases, consumers’ real wealth, decreases, causing decrease in their purchasing power. As a result, there will...
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