A decrease in the price level
A) decreases investment spending,thereby shifting the AD curve.
B) increases investment spending,thereby shifting the AD curve.
C) does not shift the AD curve.
D) increases autonomous consumption spending,thereby shifting the AD curve.
E) changes the slope of the AD curve.

Question

Quizplus · Accepted Answer

A decrease in the price level results in a movement along the AD curve, not a shift. The AD curve shifts due to changes in factors like consumer confidence, fiscal policy, or monetary policy, not due to changes in the price level itself.

A Decrease in the Price Level