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Question: The slope of the AD curve:
(a) Why does the AD curve slope downward?
(b) If the AD curve were more steeply sloped, how would the economy respond differently to aggregate demand shocks (shocks to a¯)?
(c) If the curve were more steeply sloped, how would the economy respond differently to aggregate supply shocks (shocks to o¯)?
(d) What kind of economic changes in the economy would lead the curve to be more steeply sloped?
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