Why does the aggregate demand curve slope downward? Give at least three reasons and examples when addressing this question, using your text, the South University Online Library, and the Internet as resources. Identify an event that would shift the AD curve and which direction the AD curve will shift.
Assume that the federal government increases spending on public works programs, such as highway construction, by $40 billion. How does this change in spending affect the aggregate demand curve? Explain why the shift may be higher or lower than the original $40 billion.
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