If the U.S.aggregate price level rises:

Question

Quizplus · Accepted Answer

When the U.S. aggregate price level rises, the purchasing power of wealth will decrease. This means that the value of people's assets will fall in real terms, which reduces the amount of goods and services they can purchase with their savings. This can potentially decrease consumption and investment, leading to a lower aggregate demand. However, this effect may be partly offset by other factors, such as changes in export competitiveness or interest rates, so it is not safe to assume that net exports will rise or interest rates will go down in response to the price level increase.

If the U.S.aggregate Price Level Rises