If the price level decreases,other things constant,people consume
A)more because nominal income falls
B)less because nominal income rises
C)more because the real value of their wealth increases
D)more because real income increases
E)less because real income decreases

Question

Quizplus · Accepted Answer

When the price level decreases, the purchasing power of money increases. This means that people can buy more goods and services with the same amount of money. As a result, the real value of their wealth increases, which can lead to increased consumption.

If the Price Level Decreases,other Things Constant,people Consume