The price level in India increases from 131 to 137 while its trading partnersʹ price levels remain constant. As a result, people will buy ____________ Indian -made goods and there will be a ____________ movement
Along Indiaʹs aggregate demand curve.
A) more; downward
B) more; upward
C) less; upward
D) less; downward

Question

Quizplus · Accepted Answer

When the price level in India increases while trading partners' price levels remain constant, Indian goods become relatively more expensive. This leads to a decrease in the quantity of Indian-made goods demanded, resulting in an upward movement along India's aggregate demand curve.

The Price Level in India Increases from 131 to 137