An increase 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 quantity of real gross domestic product (GDP)demanded
D)decrease the quantity of real gross domestic product (GDP)demanded
E)increase the aggregate expenditure

Question

Quizplus · Accepted Answer

An increase in the price level leads to a decrease in the purchasing power of consumers, which in turn reduces the quantity of real GDP demanded.

An Increase in the Price Level in an Economy Will