Can a change in the price level cause the aggregate demand curve to shift?
A) Yes,as the price level rises,aggregate demand shifts leftward.
B) Yes,but only under the condition that the real balance effect is operational.
C) No,only a change in a factor other than the price level can shift the aggregate demand curve.
D) No,a change in the price level can only shift the aggregate supply curve.
E) none of the above

Question

Quizplus · Accepted Answer

A change in the price level results in a movement along the aggregate demand curve, not a shift of the curve itself. Shifts in the aggregate demand curve are caused by factors other than the price level, such as changes in consumer confidence, government policies, or foreign exchange rates.

Can a Change in the Price Level Cause the Aggregate