Q
According to the wealth effect aggregate demand slopes downward (negatively) because ?
-
A
A. Lower prices increase the value of money holding and consumers spending increase
-
B
B. Lower prices decrease the value of money holding and consumers spending decrease
-
C
C. Lower prices reduce money holding increase lending, interest rates fall and investment spending increase
-
D
D. Lower prices increase money holding decrease lending, interest rates rise and investment spending falls
Correct Answer:
A. A. Lower prices increase the value of money holding and consumers spending increase
