zero rate of population growth. high rate of labor force growth. high college gr

Question

zero rate of population growth. high rate of labor force growth. high college graduation rates. Aggregate demand curves slope downwards for each of the following reasons EXCEPT. You were Incorrect The substitution effect As the price level falls, people buy more of the cheaper goods and less of other goods The foreign price effect As the price level falls, US become more attractive to foreigners and domestic residents increasing net export spending The wealth effect As the price level fails, the buying power of people's savings increases and induces them to spend more. The interest rate effect As prices for outputs rise, I-costs more to make the same purchases driving up the demand for money, raising interest rates and reducing investment spending in the a

Explanation / Answer

The answer is A-) The substitution effect : As the price level falls, people buy more of the cheaper good and less of other good.

Because aggregate demand shows the relationship between the price level and real GDP demanded. And other than price level, the aggregate demand is sloping downward because of interest rate effect , the international trade effect. And the wealth effect .

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