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CAIE A-Level Economics AS 4.3.4 Ad Curve Shape Questions

Practise identifying aggregate-demand axes and explaining the interest-rate, real-balances and international-trade effects that make the AD curve slope downward.

Syllabus
2026–2028
Course
Economics 9708
Level
AS

Exam points

  • Explain why the aggregate demand curve slopes downward and identify its axes using real output or income and the average price level.

CAIE A-Level Economics AS 4.3.4 Ad Curve Shape Questions question 1

[Maximum number: 1]

Why would a fall in a country's average price level cause its aggregate demand curve to slope downwards?

A

It leads to an increase in interest rates.

B

It reduces the real value of money balances.

C

It makes the country's goods cheaper relative to foreign goods.

D

It leads to the expectation of further price falls.

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