The wealth effect, interest-rate effect, and exchange-rate effect are all explanations for

Question

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.

Answer 1

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.