An increase in the price level results in a(n)________ in the quantity of real GDP demanded because ________.
A)decrease; a higher price level reduces consumption,investment,and net exports.
B)increase; a higher price level reduces consumption,investment,and net exports.
C)decrease; a higher price level increases consumption,investment,and net exports.
D)increase; a higher price level increases consumption,investment,and net exports.

Question

Quizplus · Accepted Answer

An increase in the price level leads to a decrease in the quantity of real GDP demanded because at higher prices, individuals and firms are able to purchase fewer goods and services, leading to reduced consumption, investment, and net exports.

An Increase in the Price Level Results in A(n)________ in the Quantity