When the price level increases, aggregate planned expenditure decreases, which leads to
A) a rightward shift of the aggregate demand curve.
B) a leftward shift of the aggregate demand curve.
C) an upward movement along the aggregate demand curve.
D) a downward movement along the aggregate demand curve.
E) neither a movement along nor a shift of the aggregate demand curve.

Question

Quizplus · Accepted Answer

An increase in the price level leads to a decrease in aggregate planned expenditure, resulting in an upward movement along the aggregate demand curve, not a shift.

When the Price Level Increases, Aggregate Planned Expenditure Decreases, Which