What happens when the price level falls?
A) Total planned real spending remains constant.
B) Total planned real spending increases.
C) Total planned real spending also falls.
D) Planned real spending on goods increases but planned real spending on services falls.

Question

Quizplus · Accepted Answer

When the price level falls, the purchasing power of money increases, and this will lead to an increase in total planned real spending because consumers will have more money to spend.

What Happens When the Price Level Falls