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Economics
MEDIUM
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Economics
According to the wealth effect aggregate demand slopes downward (negatively) because ?
lower prices increase the value of money holding and consumers spending increase
Correct answer
B
lower prices decrease the value of money holding and consumers spending decrease
Option B
C
lower prices reduce money holding increase lending, interest rates fall and investment spending increase
Option C
D
lower prices increase money holding decrease lending, interest rates rise and investment spending falls
Option D
Correct answer: A
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