Question: Hello, please help me with this, I continue to get it incorrect. 2 . Why the aggregate demand curve slopes downward The following graph shows

Hello, please help me with this, I continue to get it incorrect.

2 . Why the aggregate demand curve slopes downward The following graph shows the aggregate demand (AD) curve in a hypothetical economy. At point A, the price level is 140, and the quantity of output demanded is $300 billion. Moving dcnwn along the aggregate demand curve from point A to point B, the price level falls to 120, and the quantity of output demanded rises to $500 billion. Photos - ans2JPG + Add to See all photos Choices for the drop arrow lines are as follows: G) 100 200 300 400 500 soo OUTPUT (Billions of dollars) 700 800 As the price level falls, the cost of borrowing money will . This phenomenon is known as the , causing the quantity of output demanded to Additionally, as the price level falls, the impact on the domestic interest rate will cause the real value of the dollar to in foreign exchange markets. The number of domestic products purchased by foreigners (exports) will therefore v , and the number of foreign products purchased by domestic consumers and firms (imports) will causing the quantity of domestic output demanded to . Net exports will therefore . This phenomenon is known as the v effect. As the price level falls, the cost of borrowing money will: fall, or remain the same, or rise causing the quantity of output demanded to: rise, or fall, or remain the same This phenomenon is known as the: exchange rate, or interest rate, or wealth effect Additionally, as the price level falls, the impact on the domestic interest rate will cause the real value of the dollar to: rise. or fall in foreign exchange markets The number of domestic products purchased by foreigners (exports) will therefore: rise. or fall, or remain the same products purchased by domestic consumers and firms (imports) Mill: rise, or fall. or remain the same Net exports will therefore: rise, or fall, or remain the same causing the quantity of domestic output demanded to: fall. or remain the same or rise This phenomenon is known as the: exchange rate, or interest rate, or wealth effect.
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
