Which of the following events would cause a movement along the aggregate demand curve ? A. an increase in consumption B. a decrease in the price level C. an increase in net exports D. a decrease in consumption

Question

Jordon Cordova

Business

15 February, 05:30

Which of the following events would cause a movement along the aggregate demand curve ? A. an increase in consumption B. a decrease in the price level C. an increase in net exports D. a decrease in consumption

+5

Answers (1)

Know the Answer?

Landen Farmer · Answer 1

Answer: A decrease in the price level

Explanation:

Movements along the aggregate demand curve is mainly caused by prices. As the price level increases, there is a reduction in th amount of real money supply, which forces the interest rates to increse.

Due to the increase in interest rates, there is reduction in savings and investments, which then lowers the income level for a short period of time. Also, when there is reduction in price levels, the real money supply increases.