Which of the following statements is correct?
A)The price level does not effect the level of real GDP demanded.
B)The lower the price level, the greater the quantity of real GDP demanded
C)The lower the price level, the more the aggregate demand curve shifts rightward.
D)The lower the price level, the more the aggregate demand curve shifts leftward.
E)The higher the price level, the more the aggregate demand curve shifts rightward.

Question

Quizplus · Accepted Answer

According to the inverse relationship between price level and quantity demanded, a lower price level would lead to a greater quantity of real GDP demanded. This is based on the law of demand, which states that as price falls, quantity demanded rises, all things being equal.

Which of the Following Statements Is Correct