As the price level decreases, other things being equal,
A)aggregate demand increases.
B)the quantity of real gross domestic product demanded increases.
C)the quantity of real gross domestic product demanded decreases.
D)real gross domestic product supplied increases.

Question

As the price level decreases, other things being equal,
A)​aggregate demand increases.
B)​the quantity of real gross domestic product demanded increases.
C)​the quantity of real gross domestic product demanded decreases.
D)​real gross domestic product supplied increases.

Quizplus · Accepted Answer

As the price level decreases, the purchasing power of money increases, leading to an increase in the quantity of real GDP demanded. This is represented by a movement along the aggregate demand curve, not a shift of the curve itself.

As the Price Level Decreases, Other Things Being Equal