Because decreases in the price level increase planned aggregate expenditure and short-run equilibrium output,

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This is because a decrease in the price level causes an increase in aggregate demand, which leads to an increase in equilibrium output. The inverse relationship between the price level and aggregate demand is captured by the downward-sloping aggregate demand curve. The short-run aggregate supply curve is upward-sloping because firms face sticky prices in the short-run, and so an increase in prices will result in a smaller increase in output due to diminishing marginal returns.

Because Decreases in the Price Level Increase Planned Aggregate Expenditure