Can a change in the price level change aggregate demand?
A)Yes,as the price level rises,aggregate demand falls.
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 change aggregate demand.
D)No,a change in the price level can only change aggregate supply.
E)none of the above

Question

Quizplus · Accepted Answer

Aggregate demand is not directly affected by changes in the price level; it is influenced by factors such as consumer spending, investment, government spending, and net exports. Changes in the price level affect the quantity of aggregate demand, not aggregate demand itself.

Can a Change in the Price Level Change Aggregate Demand