Aggregate demand will be affected by the purchasing power of money.

Question

Quizplus · Accepted Answer

The purchasing power of money affects the demand for goods and services, which in turn affects aggregate demand. If the purchasing power of money decreases, consumers will be able to buy fewer goods and services, leading to a decrease in aggregate demand. Conversely, if the purchasing power of money increases, consumers will be able to buy more goods and services, leading to an increase in aggregate demand.

Aggregate Demand Will Be Affected by the Purchasing Power of Money