As the price level in an economy decreases, other things being equal, the:
A)aggregate supply in the economy increases.
B)quantity of real gross domestic product demanded increases.
C)quantity of real gross domestic product demanded decreases.
D)economy's real gross domestic product supplied increases.
E)purchasing power of its currency decreases.

Question

Quizplus · Accepted Answer

As the price level in an economy decreases, the purchasing power of money increases, meaning consumers can buy more goods and services for the same amount of money. This leads to an increase in the quantity of real gross domestic product demanded, as described in option B.

As the Price Level in an Economy Decreases, Other Things