1. Aggregate demand curves slope downwards for each of the following reasons EXCEPT A. The wealth…
The following solution is suggested to handle the subject “1. Aggregate demand curves slope downwards for each of the following reasons EXCEPT A. The wealth…“. Let’s keep an eye on the content below!
Question “1. Aggregate demand curves slope downwards for each of the following reasons EXCEPT A. The wealth…”
Answer
1. For all the reasons mentioned, except the substitution effect : As the price level falls ,
people buy more of the cheaper goods and less of other
goods, AD curves slope downward. Hence, option(B) is correct.
2. Aggregate supply is the sum of the total quantity output and sales by firms and the the price level for output , input prices. Hence, option(A) is
correct.
3. Neoclassical economists highlights the importance of Aggregate Supply in determining the size and shape of the macroeconomy.
Conclusion
Above is the solution for “1. Aggregate demand curves slope downwards for each of the following reasons EXCEPT A. The wealth…“. We hope that you find a good answer and gain the knowledge about this topic of business.