An increase in aggregate expenditures resulting from a decrease in the price level is equivalent to a
A) rightward shift of the aggregate demand curve.
B) leftward shift of the aggregate demand curve.
C) movement downward along a ﬁxed aggregate demand curve.
D) decrease in aggregate supply.

Question

Quizplus · Accepted Answer

A decrease in the price level leading to an increase in aggregate expenditures is represented by a movement down along the aggregate demand curve, not a shift of the curve itself. This movement indicates a higher quantity of goods and services demanded at a lower price level.

An Increase in Aggregate Expenditures Resulting from a Decrease in the Price