If the price level falls,the real value of the currency
A)rises,so people will want to buy more.This response helps explain the slope of the aggregate demand curve.
B)rises,so people will want to buy more.This response shifts aggregate demand to the right.
C)falls,so people will want to buy less.This response helps explain the slope of the aggregate demand curve.
D)falls,so people will want to buy less.This response shifts aggregate demand to the left.

Question

Quizplus · Accepted Answer

If the price level falls, the purchasing power of currency increases, which means that people can now buy more goods and services with the same amount of currency. This leads to an increase in the real value of the currency, making people want to buy more. This helps to explain the downward slope of the aggregate demand curve, as a lower price level will lead to a higher quantity demanded due to increased real income and purchasing power.

If the Price Level Falls,the Real Value of the Currency