1.

According to the wealth effect aggregate demand slopes downward (negatively) because ?

A. lower prices increase the value of money holding and consumers spending increase
B. lower prices decrease the value of money holding and consumers spending decrease
C. lower prices reduce money holding increase lending, interest rates fall and investment spending increase
D. lower prices increase money holding decrease lending, interest rates rise and investment spending falls
Answer» B. lower prices decrease the value of money holding and consumers spending decrease


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