Upgrade subject to access all content
Which of these statements best explains the shape of the aggregate demand curve?
The prices of output goods increase slightly faster than those of inputs, which are sticky, so aggregate demand is upward-sloping
At lower prices, the quantity demanded increases because of the Law of Demand, so aggregate demand is downward-sloping.
At higher price levels, people have more money, so aggregate demand is upward-sloping.
At higher prices, people are willing and able to purchase fewer goods, so aggregate demand is downward-sloping.
At lower price levels, people's money is worth more and they can purchase more goods, so aggregate demand is downward-sloping.