As the price level falls, the quantity of real wealth__________ and the aggregate quantity of real GDP demanded __________ .
A) decreases; increases
B) increases; decreases
C) increases; increases
D) decreases; decreases

Question

Quizplus · Accepted Answer

As the price level falls, the purchasing power of money increases, leading to an increase in real wealth. This increase in real wealth typically leads to an increase in the aggregate quantity of real GDP demanded.

As the Price Level Falls, the Quantity of Real Wealth__________