People will spend more if the price level
A) rises because rising prices increase the real value of the fixed quantity of money.
B) rises because rising prices decrease the real value of a dollar.
C) falls because falling prices increase the real value of a dollar.
D) falls because falling prices decrease the real value of a dollar.

Question

Quizplus · Accepted Answer

When the price level falls, the real value of a dollar increases, meaning consumers can purchase more goods and services with the same amount of money, leading to increased spending.

People Will Spend More If the Price Level