An increase in the price level leads to
A)a rightward shift of the aggregate demand curve.
B)a leftward shift of the aggregate demand curve.
C)a movement upward along the aggregate demand curve.
D)a movement downward along the aggregate demand curve.
E)neither a shift in the aggregate demand curve nor a movement along it.

Question

Quizplus · Accepted Answer

An increase in the price level causes a movement upward along the aggregate demand curve, as it reflects a higher price level leading to a decrease in the quantity of goods and services demanded.

An Increase in the Price Level Leads to