A decrease in the price level in an economy is likely to cause a(n) _____
A) decrease in the real value of dollar-denominated assets.
B) downward shift of the aggregate expenditure line.
C) decrease in the equilibrium level of output demanded.
D) increase in consumption spending.
E) leftward shift of the aggregate demand curve.

Question

Quizplus · Accepted Answer

A decrease in the price level increases the real value of money, leading to higher consumption spending as consumers feel wealthier.

A Decrease in the Price Level in an Economy Is