Which of the following helps explain why the aggregate quantity demanded of goods and services is inversely related to prices within the framework of the AD/AS model?
A
As prices fall, domestic consumers have an incentive to buy more of the cheaper goods and services.
B
As prices fall, the monetary authorities will have to increase the money supply, which will lead to an increase in the quantity of goods and services purchased.
C
As prices fall, the government will have to reduce taxes, which will lead to an increase in the quantity of goods and services purchased.
D
As prices fall, the wealth of people holding the fixed quantity of money increases, causing them to expand their purchases of goods and services.