1. Explain the three reasons the aggregate demand curve slopes downward. (2 marks) – Maximum number of words 100 Explain how each of the following events in questions

2, 3 would affect the aggregate demand curve.

2. Consumers become more pessimistic about the future economic growth as unemployment rises. No graph required (1 mark) – Maximum number of words 50

3. Domestic prices increase, which decreases exports. No graph required (1 mark) – Maximum number of words 50