Refer to the given data. If the Fed reduced the reserve requirement from 20 percent to 16 percent, excess reserves in the commercial banking system would increase by and the monetary multiplier would rise to .

Which of the statements best describes why the aggregate demand curve is downward sloping? an increase in the aggregate price level causes consumer and investment spending to fall, because consumer purchasing power decreases and money demand increases. as the aggregate price level increases, consumer expectations about the future change. as the aggregate price level decreases, the stock of existing physical capital increases. as a good's price increases, holding all else constant, the good's quantity demanded decreases.