QUESTION 1 The aggregate demand curve: O is upward sloping because a higher price level is necessary to make production profitable as production costs rise. O is downward sloping because production costs decline as real output increases. O shows the amount of expenditures required to induce the production of each possible level of real output. shows the amount of real output that will be purchased at each possible price level. O shows the various amounts of real output that businesses will produce at each price level