Which of the following will occur when an economy's price level increases?
A) Aggregate demand will increase.
B) The purchasing power of money will increase.
C) The purchasing power of money will decrease.
D) The real value of wealth will increase.

Question

Quizplus · Accepted Answer

When the price level increases, the purchasing power of money decreases because it takes more money to purchase the same amount of goods and services. This can lead to a decrease in aggregate demand and a decrease in the real value of wealth.

Which of the Following Will Occur When an Economy's Price