If the price level in the U.S.increases,aggregate output demanded:
A)decreases because U.S.products become cheaper relative to foreign products.
B)decreases because U.S.products become more expensive relative to foreign products.
C)increases because U.S.products become cheaper relative to foreign products.
D)increases because U.S.products become more expensive relative to foreign products.
E)decreases because household wealth and spending increase.

Question

Quizplus · Accepted Answer

When the price level in the U.S. increases, U.S. products become more expensive relative to foreign products. This makes U.S. goods less attractive to both domestic and foreign buyers, leading to a decrease in the aggregate output demanded.

If the Price Level in the U