Question

The wealth effect, interest-rate effect, and exchange-rate effect are all explanations for
a. the slope of short-run aggregate supply.
b. the slope of the aggregate-demand curve.
c. the slope of long-run aggregate supply.
d. shifts in the aggregate-demand curve.
GPT-4o mini
The correct answer is: **b. the slope of the aggregate-demand curve.**

These effects explain how changes in the price level can influence the quantity of goods and services demanded in the economy, thus impacting the downward slope of the aggregate-demand curve.

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