In the late 1990s, the U. S. stock market boomed, causing U. S. consumption to rise. Economists refer to this outcome as the Multiple Choice Keynes effect. interest-rate effect. wealth effect. multiplier effect.

Which of the statements best describes why the aggregate demand curve is downward sloping? an increase in the aggregate price level causes consumer and investment spending to fall, because consumer purchasing power decreases and money demand increases. as the aggregate price level increases, consumer expectations about the future change. as the aggregate price level decreases, the stock of existing physical capital increases. as a good's price increases, holding all else constant, the good's quantity demanded decreases.