A rising price level should shift the expenditure schedule

Name: A rising price level should shift the expenditure schedule
Brand: Quizplus
Rating: 4.8 (49 reviews)

Question

Quizplus · Accepted Answer

A rising price level indicates inflation, which reduces the real value of money and increases the cost of goods and services. As a result, consumers are likely to reduce their spending, leading to a downward shift in the expenditure schedule. This shift would further decrease the equilibrium real GDP as both consumption and investment spending would decrease.

A Rising Price Level Should Shift the Expenditure Schedule