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AP® Macroeconomics

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Moderate

Shape of Aggregate Demand

APMACR-K@EPXS

Which of these statements best explains the shape of the aggregate demand curve?

A

The prices of output goods increase slightly faster than those of inputs, which are sticky, so aggregate demand is upward-sloping

B

At lower prices, the quantity demanded increases because of the Law of Demand, so aggregate demand is downward-sloping.

C

At higher price levels, people have more money, so aggregate demand is upward-sloping.

D

At higher prices, people are willing and able to purchase fewer goods, so aggregate demand is downward-sloping.

E

At lower price levels, people's money is worth more and they can purchase more goods, so aggregate demand is downward-sloping.