1.By looking at aggregate demand via its component parts, we can conclude that the aggregate demand curve is downward sloping because ________.

a.a higher inflation rate causes the real interest rate to rise, and stimulates planned investment spending

b.a lower inflation rate causes the real interest rate to rise, and stimulates planned investment spending

c.a lower inflation rate causes the real interest rate to fall, and stimulates planned investment spending

2.The downward slope of the aggregate demand curve is due to ________ and ________.

a.planned investment spending; net exports

b.financial frictions; net transfers

c.planned investment spending; financial frictions

3.Everything else held constant, an autonomous monetary policy easing ________ aggregate ________.

a.decreases; supply

b.increases; supply

c.increases; demand

4.Everything else held constant, expansionary monetary policies will cause ________.

a.the quantity of aggregate demand to decrease

b.the quantity of aggregate demand to increase

c.aggregate demand to increase