When the price level falls,
A)there is a movement downward along the AS curve.
B)both the potential GDP line and the AS curve shift leftward.
C)there is a movement upward along the AS curve.
D)the AS curve shifts rightward but the potential GDP line does not shift.
E)the AS curve shifts leftward but the potential GDP line does not shift.

Question

Quizplus · Accepted Answer

When the price level falls, there is a movement downward along the Aggregate Supply (AS) curve, as the quantity of goods and services supplied decreases at lower price levels.

When the Price Level Falls