Asked by Ellen Likens on Jun 20, 2024
Verified
A decrease in the price level in an economy will _____.
A) shift the aggregate demand curve to the right
B) shift the aggregate demand curve to the left
C) increase the level of aggregate quantity demanded
D) decrease the level of aggregate quantity demanded
E) shift the aggregate expenditure line downward
Price Level
Price level indicates the average of current prices across the entire spectrum of goods and services produced in the economy, often compared over time to assess inflation or deflation.
Aggregate Demand Curve
The total demand curve illustrates the overall volume of goods and services the economy requires at various price points.
- Acquire an understanding of the influence of price level movements on aggregate demand, aggregate supply, and aggregate expenditure.
Verified Answer
BS
Brianna SkylarJun 26, 2024
Final Answer :
C
Explanation :
A decrease in the price level increases the purchasing power of consumers' money, leading to an increase in the quantity of goods and services demanded across the economy, which is represented as a movement along the aggregate demand curve, not a shift of the curve itself.
Learning Objectives
- Acquire an understanding of the influence of price level movements on aggregate demand, aggregate supply, and aggregate expenditure.