One reason real output declines when the aggregate price level rises is the reduction in the purchasing power of money.

Name: One reason real output declines when the aggregate price level rises is the reduction in the purchasing power of money.
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When the aggregate price level rises, each unit of currency can purchase fewer goods and services, reducing the purchasing power of money. As a result, consumers and businesses may reduce their spending, leading to a decline in real output.

One Reason Real Output Declines When the Aggregate Price Level