Question

The aggregate demand curve is Question 1 options: A) horizontal when there is considerable unemployment in the economy. B) downsloping because production costs decrease as real output rises. C) downsloping because of the interest-rate, real-balances, and foreign purchases effects. D) vertical under conditions of full employment.

Answer 1

C)

Step-by-step explanation:

The aggregate demand curve is a curve graph in economics that demonstrates the total quantity of the goods that are in demand within the economy at various price levels. As you can see from the illustration below it is a downsloping curve, and this is because of the interest-rate, real-balances, and foreign purchases effects.