Suppose the price level decreases.How will aggregate demand be affected?
A) The aggregate demand curve will shift to the right.
B) The aggregate demand curve will shift to the left.
C) The level of aggregate quantity demanded will increase.
D) The level of aggregate quantity demanded will decrease.

Question

Suppose the price level decreases.How will aggregate demand be affected?  
A) The aggregate demand curve will shift to the right. 
B) The aggregate demand curve will shift to the left. 
C) The level of aggregate quantity demanded will increase. 
D) The level of aggregate quantity demanded will decrease.

Quizplus · Accepted Answer

A decrease in the price level increases the purchasing power of consumers' money, leading to an increase in the quantity of goods and services demanded across the economy. This is represented by a movement along the aggregate demand curve to a higher quantity demanded, not a shift of the curve itself.

Suppose the Price Level Decreases