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2 . Why the aggregate demand curve slopes downward (fill in the blanks below with the correct selection) The following graph shows the aggregate demand

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2 . Why the aggregate demand curve slopes downward (fill in the blanks below with the correct selection)

The following graph shows the aggregate demand (AD) curve in a hypothetical economy. At point A, the price level is 140, and the quantity of output demanded is $300 billion. Moving down along the aggregate demand curve from point A to point B, the price level falls to 120, and the quantity of output demanded rises to $500 billion.

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? 170 180 150 A 140 130 PRICE LEVEL B 120 110 AD 100 90 0 100 200 300 400 500 600 700 800 OUTPUT (Billions of dollars)

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