As the aggregate price level declines
A) there is a movement down along the aggregate demand curve.
B) the aggregate demand curve shifts to the left.
C) there is a movement up along the aggregate demand curve.
D) the aggregate demand curve shifts to the right.

Question

Quizplus · Accepted Answer

A decline in the aggregate price level leads to a decrease in the cost of goods and services, which increases the purchasing power of consumers. This, in turn, leads to an increase in the demand for goods and services, causing a movement down along the existing aggregate demand curve.

As the Aggregate Price Level Declines