Practise explaining downward-sloping aggregate demand through real wealth, interest-rate and international-competitiveness effects as the general price level changes.
The aggregate demand curve is typically downward sloping.
What is one possible explanation for this?
A fall in the price level will lead to a rise in demand for imports.
As the price level falls, improved productivity will reduce unit costs.
If the price level is high, any interest rate changes will encourage consumption.
The real value of assets increases as the price level falls.
D