As the price level falls, the holders of money become richer with higher real purchasing power and as a result, they buy more. This is one reason why the aggregate demand curve is downward sloping.

Question

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As the price level falls, the real value of money increases, allowing consumers to purchase more goods and services for the same amount of money, which is a key reason why the aggregate demand curve slopes downward.

As the Price Level Falls, the Holders of Money Become