If the price level in Great Britain increases from 102 to 105 (holding all else constant), real wealth ________ and there is a movement ________ along Great Britain's aggregate demand curve.

Question

Quizplus · Accepted Answer

When the price level increases, real wealth decreases because the purchasing power of money falls. This leads to a movement upward along the aggregate demand curve as the quantity of goods and services demanded decreases.

If the Price Level in Great Britain Increases from 102