An increase in the U.S. price level causes a
A) shift of the U.S. aggregate demand curve to the right.
B) shift of the U.S. aggregate demand curve to the left.
C) movement up the U.S. aggregate demand curve.
D) movement down the U.S. aggregate demand curve.

Question

Quizplus · Accepted Answer

An increase in the U.S. price level results in a movement up along the U.S. aggregate demand curve, not a shift of the curve itself. This is because the aggregate demand curve shows the quantity of goods and services demanded at different price levels, and an increase in price level decreases the quantity demanded, moving up along the curve.

An Increase in the U