A rise in the price level brings a ________ in the buying power of money that ________ consumption expenditures and causes the quantity of real GDP demanded to ________.
A)rise;decreases;decrease
B)fall;decreases;decrease
C)fall;increases;increase
D)rise;increases;increase
E)fall;decreases;increase

Question

Quizplus · Accepted Answer

A rise in the price level reduces the purchasing power of money, leading to a decrease in consumption expenditures. As a result, the quantity of real GDP demanded decreases. This relationship is captured by the downward sloping aggregate demand curve. Choice B captures this relationship correctly.

A Rise in the Price Level Brings a ________ in the Buying