An increase in the U.S.price level (foreign prices held constant) will cause a leftward shift in the aggregate demand curve.

Question

Quizplus · Accepted Answer

An increase in the U.S. price level, with foreign prices held constant, would not cause a leftward shift in the aggregate demand curve. Instead, it might affect the net exports negatively due to decreased competitiveness of U.S. goods, but the aggregate demand curve itself shifts due to changes in consumption, investment, government spending, and net exports, not directly due to changes in the price level.

An Increase in the U