A rise in the price level ________ the buying power of money and ________ the quantity of real GDP demanded.
A)lowers;decreases
B)does not affect;does not change
C)raises;decreases
D)lowers;increases
E)does not affect;increases

Question

Quizplus · Accepted Answer

A rise in the price level lowers the buying power of money because each unit of currency can now purchase fewer goods and services. This decrease in purchasing power typically leads to a decrease in the quantity of real GDP demanded, as consumers and businesses are less able to buy goods and services at higher prices.

A Rise in the Price Level ________ the Buying Power