How will a decrease in the price level affect the aggregate expenditure line?
A) It will shift the aggregate expenditure line upward.
B) It will shift the aggregate expenditure line downward.
C) It will cause a movement up along the aggregate expenditure line.
D) It will cause a movement down along the aggregate expenditure line.

Question

How will a decrease in the price level affect the aggregate expenditure line?  
A) It will shift the aggregate expenditure line upward. 
B) It will shift the aggregate expenditure line downward. 
C) It will cause a movement up along the aggregate expenditure line. 
D) It will cause a movement down along the aggregate expenditure line.

Quizplus · Accepted Answer

A decrease in the price level increases the real wealth of households, leading to an increase in consumption and thus shifting the aggregate expenditure line upward.

How Will a Decrease in the Price Level Affect the Aggregate