A rise in the price level
A)shifts the AE curve upward and brings a movement down along the AD curve.
B)shifts the AD curve rightward and brings a movement up along the AE curve.
C)shifts the AE curve downward and shifts the AD curve rightward.
D)shifts the AD curve leftward and brings a movement down along the AE curve.
E)shifts the AE curve downward and brings a movement up along the AD curve.

Question

Quizplus · Accepted Answer

A rise in the price level decreases aggregate expenditure (AE), shifting the AE curve downward, and causes a movement up along the aggregate demand (AD) curve as the quantity of real GDP demanded decreases.

A Rise in the Price Level