An increase in the GDP price level will:
A)decrease aggregate demand.
B)increase the quantity of real domestic output demanded.
C)increase aggregate demand.
D)decrease the quantity of real domestic output demanded.

Question

Quizplus · Accepted Answer

An increase in the GDP price level typically leads to a decrease in the quantity of real domestic output demanded because higher prices reduce the purchasing power of money, leading to lower consumption and investment.

An Increase in the GDP Price Level Will