Question

Aggregate demand function is represented by a downward sloping curve.

• A. True
• B. False

Answer 1

The correct option is B False

False.

AD curve is upward sloping owing to increasing income in the economy. As the income increases, the expenditure by the people also increases which leads to rising AD and vice versa. Therefore, income and AD has a positive relationship between them due to which AD curve is upward sloping.