When the price level increases people:
A) demand a smaller quantity of goods and services in the aggregate.
B) feel more wealthy.
C) have the same real value of assets, regardless of the change in the price level.
D) want to spend more, but can't due to the prices of all goods and services going up.

Question

Quizplus · Accepted Answer

When the price level increases, the purchasing power of money decreases, and therefore people are able to buy fewer goods and services with the same amount of money. Therefore, they demand a smaller quantity of goods and services in the aggregate.

When the Price Level Increases People