ompared to the U. S. aggregate demand curve, the reason that the demand curve for an individual product, such as bananas, slopes downward is A. different, because consumers can substitute between individual products. B. different, because individual products are not traded internationally. C. the same, because individual products are also affected by macroeconomic variables. D. the same, because the consumption of individual products is also determined by wealth.

Question

Aubree

Business

1 October, 15:33

ompared to the U. S. aggregate demand curve, the reason that the demand curve for an individual product, such as bananas, slopes downward is A. different, because consumers can substitute between individual products. B. different, because individual products are not traded internationally. C. the same, because individual products are also affected by macroeconomic variables. D. the same, because the consumption of individual products is also determined by wealth.

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Damari Walters · Answer 1

The correct option is:

A. different, because consumers can substitute between individual products.

Explanation:

Aggregate demand curve: The aggregate demand curve establishes a relation between the level of price of our household items to the GDP which is real of all the firms, household items and also the government.

Aggregate supply curve: The curve which is aggregate short curve i. e. short run builds a relationship in short run between the GDP that is being produced by the real firms to the original price level.

Reasons for the downward slope of aggregate demand curve:

The main reason for downward slope of the aggregate demand curve is a place where the price level changing affects the government purchases. Also the government spending effect is the cause for it.

So, here the correct option is:

A. different, because consumers can substitute between individual products.