If the price level in the U.S.decreases,aggregate output demanded:
A)decreases because U.S.products become cheaper relative to foreign products.
B)decreases because U.S.products become more expensive relative to foreign products.
C)increases because U.S.products become cheaper relative to foreign products.
D)increases because U.S.products become more expensive relative to foreign products.
E)decreases because household wealth and spending in the U.S.decrease.

Question

Quizplus · Accepted Answer

When the price level in the U.S. decreases, U.S. products become cheaper relative to foreign products, which typically leads to an increase in aggregate output demanded as consumers both domestically and internationally are more likely to purchase these cheaper goods.

If the Price Level in the U