2215EconomicsMedium
According to the wealth effect aggregate demand slopes downward (negatively) because?
Alower prices reduce money holding increase lending, interest rates fall and investment spending increase
Blower prices increase the value of money holding and consumers spending increase
Clower prices increase money holding decrease lending, interest rates rise and investment spending falls
Dlower prices decrease the value of money holding and consumers spending decrease
Correct answer
B. lower prices increase the value of money holding and consumers spending increase
Explanation
The correct answer is lower prices increase the value of money holding and consumers spending increase.