The vertical axis of the aggregate demand and aggregate supply model measures the overall The aggregate curve shows the quantity of goods and services that firms produce and sell at each price level. As the price level falls, the cost of borrowing money will This phenomenon is known as the causing the quantity of output demanded to effect. Additionally, as the price level falls, the impact on the domestic interest rate will cause the real value of the dollar to in foreign exchange markets. The number of domestic products purchased by foreigners (exports) will therefore and the number of foreign products purchased by domestic consumers and firms (imports) will Not exports will therefore causing the quantity of domestic output demanded to This phenomenon is known as the effect
