A fall in the price level will _____
A) cause an upward movement along the aggregate demand curve.
B) cause a downward movement along the aggregate demand curve.
C) cause a leftward shift of the aggregate demand curve.
D) cause a rightward shift of the aggregate demand curve.
E) have no impact on the aggregate demand curve.

Question

Quizplus · Accepted Answer

A fall in the price level causes an increase in the purchasing power of consumers, leading to an increase in consumption, investment, and net exports. As a result, there is a movement down along the aggregate demand curve, indicating a higher quantity demanded at each price level.

A Fall in the Price Level Will _____