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Aggregate Demand 160 Aggregate Demand 150 140 130 120 PRICE LEVEL 110 100 0 100 200 300 400 500 600 700 800 REAL GDP (Billions of dollars) Which of the following are reasons the aggregate demand curve is downward sloping? Check all that apply. A lower price level leads to a lower interest rate. A lower price level increases consumption through the income effect. A higher price level makes domestically produced goods more expensive than foreign goods. As the aggregate price level rises, the purchasing power of households' saving balances will , causing the quantity of output demanded to . This phenomenon is known as the effect