As the price level in the economy rises, which of the following occurs?

Question

Quizplus · Accepted Answer

As the price level in the economy rises, the value of money in terms of what it can buy (real money) decreases, and real aggregate demand typically decreases because goods and services become more expensive in real terms. Total spending in money terms doesn't necessarily decrease; it could increase or stay the same depending on various factors such as the velocity of money and the nominal money supply.

As the Price Level in the Economy Rises, Which of the Following